I own a home in California. I took a first and second mortgage on my house. My father has loaned me the funds to pay off my second mortgage and pay him interest (at a lower rate). I have been advised that I should file a Quit Claim Deed in favor of my father so that I may properly deduct the interest payments. In reviewing these Quit Claim Deeds they seem to be transfers of ownership. Is this correct? do I want to transfer ownership to him because he holds the mortgage? One little extra piece of information in case it matters, I paid the second mortgage down to $0 but did not cancel it...so technically my father is third in line I think.
Any guidance would be greatly appreciated.