A power of attorney can give you authority to conduct real estate transactions, including signing mortgage documents, for your parents. If your parents can’t sign their mortgage paperwork for themselves and your power of attorney contains the correct language, you may use the power of attorney to sign on their behalf. State laws vary on whether the power of attorney document needs to be recorded as part of the public record.
A power of attorney grants the agent -- the person appointed in the document – authority to do certain tasks on behalf of the principal -- the person who grants the powers. A power of attorney can give the agent authority to conduct certain real estate transactions, such as signing mortgage documents or closing on a home. Alternatively, a power of attorney can grant an agent broad, general powers to conduct numerous types of financial transactions as permitted by law, and those general powers may include the authority to buy and sell real estate.
Granting a Power of Attorney
A parent may use a power of attorney to appoint his child -- or anyone else -- as his agent. Typically, each parent must sign a separate power of attorney since a power of attorney signed by only one parent can only grant the child power over the signing parent’s affairs. Each parent must have the mental capacity to sign a power of attorney, so if one of your parents is mentally incapacitated, due to dementia for example, he may not be able to give you a legal power of attorney.
If your parents give you a power of attorney that grants you the power to sign their mortgage documents, you should be prepared to do everything your parents would do. You may need to negotiate the terms of the mortgage or fulfill any requirements of the closing process, in addition to simply signing the mortgage papers. You must also act in your parents’ best interests, not your own. Your state’s laws may require the power of attorney itself to be recorded in the office of the county recorder where the property is located if the power of attorney gives you authority to sell, mortgage or lease the property.
Acceptance of the Power of Attorney
As your parents’ agent, you may also want to check with the mortgage lending institution to make sure it will accept your power of attorney. Banks set their own policies regarding whether to accept powers of attorney, and some banks require the use of their own forms instead of a power of attorney drafted elsewhere. The lender can also refuse to allow you to sign the mortgage documents if it is not satisfied with your power of attorney document.