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Message
Can I get some advice on cosigning a mortgage refinance?
Posted on 9/6/16 at 6:46 pm
Posted on 9/6/16 at 6:46 pm
Very unusual situation. A sibling quit his job several years ago to move in with our parents to help my dad who is in failing health which has turned into a 24/7 job for the last 3 years.
He owes roughly 80k on his house mortgage which he's renting but wants to refi to cut his interest rate in half and also his monthly note while he's hamstrung.
He has no income and I can easily afford the mortgage so I was wondering if I could use only my financials to secure the loan?
What do I need to look out for?
He owes roughly 80k on his house mortgage which he's renting but wants to refi to cut his interest rate in half and also his monthly note while he's hamstrung.
He has no income and I can easily afford the mortgage so I was wondering if I could use only my financials to secure the loan?
What do I need to look out for?
This post was edited on 9/6/16 at 6:47 pm
10
Posted on 9/6/16 at 6:51 pm to CAD703X
Making sure you're in the will since you're essentially subsidizing dad's long-term care
Posted on 9/6/16 at 7:07 pm to CAD703X
Just make sure you understand what you are getting in to, this makes you 100% responsible for repayment of the loan
Posted on 9/6/16 at 7:40 pm to CAD703X
Frankly, I would recommend just putting it in your name. Count anything you get from them as a bonus. Otherwise it could turn into heart break and major issues.
ETA: I misunderstood. Yeah I don't see an issue with what you are looking to do but I'm not sure.
ETA: I misunderstood. Yeah I don't see an issue with what you are looking to do but I'm not sure.
This post was edited on 9/6/16 at 8:34 pm
Posted on 9/6/16 at 7:52 pm to baldona
Just to be clear my parents house is paid off. My siblings house is in another city and state so he can't really get back there to do much with it.
Understand I'm completely on the hook for the mortgage and I'm not worried about that. I trust him with my life so doing this small favor for him is nothing.
I just want to make the process simple for him and do it all myself if possible even. Neither he nor I care whose name is on the mortgage and I figure both would be on it.
Any suggestions on a good mortgage company that can streamline the process?
Anyone on here handle mortgages? I know 80k isn't exactly a huge draw.
Understand I'm completely on the hook for the mortgage and I'm not worried about that. I trust him with my life so doing this small favor for him is nothing.
I just want to make the process simple for him and do it all myself if possible even. Neither he nor I care whose name is on the mortgage and I figure both would be on it.
Any suggestions on a good mortgage company that can streamline the process?
Anyone on here handle mortgages? I know 80k isn't exactly a huge draw.
Posted on 9/6/16 at 8:59 pm to CAD703X
What is the value of said house he's renting and owes 80k on?
What city state house is in?
Is he getting good rent/good tenant?
What city state house is in?
Is he getting good rent/good tenant?
Posted on 9/6/16 at 9:09 pm to CAD703X
quote:
I trust him with my life so doing this small favor for him is nothing
Well if you were dieing I'm sure he'd save you but co-signing a loan is a different risk in both of yours eyes. As others said its better to just get the mortgage in your name and have him repay you. It's probably just simpler in the end.
Posted on 9/6/16 at 9:50 pm to C
If he trusts you as you trust him, the easiest thing to do is to put everything into your name, including both the house and the mortgage. You will be in financial position over the short, medium and long term to make the big picture financial decisions anyway.
It is the easiest, most simplistic, frictionless path forward. He can always stay on title which gives him a measure of security moving forward.
It is the easiest, most simplistic, frictionless path forward. He can always stay on title which gives him a measure of security moving forward.
This post was edited on 9/6/16 at 9:51 pm
Posted on 9/6/16 at 9:50 pm to CAD703X
Do you have 80K to be the bank? Is that an option?
Posted on 9/6/16 at 11:48 pm to CAD703X
I would have him contact his lender and see if an in house refi is possible, some lenders do this to retain notes if they are in good standing, often much cheaper and simpler this way.
I would not take out a loan in my name against property titled in someone else's name, way too many unforeseen things can go wrong on both ends and situations change.
just my 2 cents
I would not take out a loan in my name against property titled in someone else's name, way too many unforeseen things can go wrong on both ends and situations change.
just my 2 cents
Posted on 9/7/16 at 5:47 am to CAD703X
The way I understand lending laws today, his credit/unemployment may be an issue, even with you as cosignor.
Try pinnacle bank. They have the most portfolio products here in TN. Or try your local bank based on relationship may have more pull with underwriter.
Good luck
Try pinnacle bank. They have the most portfolio products here in TN. Or try your local bank based on relationship may have more pull with underwriter.
Good luck
This post was edited on 9/7/16 at 5:48 am
Posted on 9/7/16 at 6:14 am to ItNeverRains
I'm in TN, his house is in TX, he's living with my folks in LA.
He has good renters and is making ends meet now just barely; a refi would give him much needed breathing room
What's the difference between putting it in my name vs having both names on the title? Would he have to "sell" it to me for 80k in order for me the simply assume the loan? Would the tax implications be different if I didn't simply cosign?
He has good renters and is making ends meet now just barely; a refi would give him much needed breathing room
What's the difference between putting it in my name vs having both names on the title? Would he have to "sell" it to me for 80k in order for me the simply assume the loan? Would the tax implications be different if I didn't simply cosign?
This post was edited on 9/7/16 at 6:16 am
Posted on 9/7/16 at 7:26 am to CAD703X
quote:
What's the difference between putting it in my name vs having both names on the title?
In a perfect world there is not much difference, however if he were to marry and divorce the house and any value accrued could be deemed community property, he could father a child and die, who knows what could happen over the course of the mortgage.
If you really just want to help him out, pay a few notes to give him some breathing room and leave it alone. JMHO
Posted on 9/7/16 at 7:39 am to CAD703X
Why not sell the house?
Posted on 9/7/16 at 7:57 am to CAD703X
Just curious, what's the current rate and where is he at in repayment? Also, what's the value of the home?
It may be easier and cleaner for you to just buy the house, you rent it out and he can have some/all of the profits. Also make him the benefactor of the house. Idk, it's getting a little complicated, but if the rate is like 7% or something it would be worth it.
Consigning is a mess and may not even be a help.
ETA: If the rate is decent, just help him by paying the note perhaps.
It may be easier and cleaner for you to just buy the house, you rent it out and he can have some/all of the profits. Also make him the benefactor of the house. Idk, it's getting a little complicated, but if the rate is like 7% or something it would be worth it.
Consigning is a mess and may not even be a help.
ETA: If the rate is decent, just help him by paying the note perhaps.
This post was edited on 9/7/16 at 8:01 am
Posted on 9/7/16 at 8:13 am to TigerDeBaiter
Interest rate is like 7%
It's his house that once my dad passes he will likely return to
House is worth around 250 according to Zillow. It's very close to UTSA making it a rental magnet.
I'm not coming here with a solution looking for support, I'm honestly trying to help him out so all advice welcome.
With interest being cut in half along with his monthly note the rental income generated would be more in his favor and he wouldn't have to let it go.
He dropped a lucrative IT career to care for our parents full time so I owe him.
Still considering all options.
It's his house that once my dad passes he will likely return to
House is worth around 250 according to Zillow. It's very close to UTSA making it a rental magnet.
I'm not coming here with a solution looking for support, I'm honestly trying to help him out so all advice welcome.
With interest being cut in half along with his monthly note the rental income generated would be more in his favor and he wouldn't have to let it go.
He dropped a lucrative IT career to care for our parents full time so I owe him.
Still considering all options.
This post was edited on 9/7/16 at 8:16 am
Posted on 9/7/16 at 9:43 am to CAD703X
In either case it's going to be a non-owner occupied mortgage and those rates and terms will apply.
Posted on 9/7/16 at 9:44 am to CAD703X
What you are doing is great, but it's odd to me he doesn't work at all and very poor financially for him not to have refinanced already. Rates have been under 5% for many many years, why he hasn't already refinanced worries me and why he doesn't work 10-20 hours in a field that is very easy to work from home worries me more.
He could always sell the house. I think what you are doing is great, but it's not his only option. I just feel like you should see if another option makes sense before doing this.
If anything, I think I would look into owning 1/2 the property or something and maybe not even worrying about the income but just the equity. It just seems like to me, you are teeing yourself up to be screwed when there are other options that are not bad for your brother.
He could always sell the house. I think what you are doing is great, but it's not his only option. I just feel like you should see if another option makes sense before doing this.
If anything, I think I would look into owning 1/2 the property or something and maybe not even worrying about the income but just the equity. It just seems like to me, you are teeing yourself up to be screwed when there are other options that are not bad for your brother.
Posted on 9/7/16 at 9:48 am to VABuckeye
quote:
In either case it's going to be a non-owner occupied mortgage and those rates and terms will apply.
This is a great point. He needs to be careful because if the bank thinks he lives there and he goes to refinance they may not take kindly to that. Rental property rates are usually at best Prime plus 1, so you are looking at mid 4% most likely in the least. Still much better then 7%.
If he has $160k in equity and the property is out of state, he would IMO be crazy not to sell it and buy a cheaper property or 2 with cash in the state he lives. Solves all the problems, gives him income, etc.
Posted on 9/7/16 at 9:59 am to baldona
Grrr I just want to help a brother out.... Literally.
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