Jump to content

Please consider disabling your adblocker for CreditBoards if you have not already done so.  This site depends on advertising revenue to stay online.


Sign in to follow this  

Home Equity Question

The last post in this topic was posted 3465 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Recommended Posts

My MIL is in an assisted living facility. She still has her home which is paid for; no one is living there at present. Would it be possible for her to take a home equity loan/line of credit on her home?

 

My MIL had money to take care of her, but the funds are now dwindling. We were getting ready to sell her home, when my husband got sentimental about it (he grew up there) and now we are thinking of purchasing her home. We would have to sell our home first before we could purchase it though which may take some time. My husband is afraid his mom will run out of the funds she has on hand for her monthy rent at the assisted living place, which is why we thought of the home equity thing. This way she would have funds available for her rent and then when we purchase the home that loan would be paid off. My husband is her primary caretaker/power of attorney.

 

Would this work? Thanks.

Share this post


Link to post
Share on other sites

Mercymygft;

 

This would be a doable loan but there are a couple of variables. In order to take out a loan or an equity line of credit, your MIL's debt to income ratio would have to support the loan. As a rule of thumb it would have to be 45% with some lending institutions allowing you to go to 50% with a case by case exception. The good news is you and your husband can co-sign for her. You would need to consult an experinced lending institution to determine whether this scenario works and the correct way to structure it.

 

 

Best Regards;

Share this post


Link to post
Share on other sites

There is not enough information to know if you will be able to however this may be an option. I assume since MIL is running out of money she has no income? That would mean she would not qualify on her own for a loan. She will need to be on the loan but can as mentioned have a coborrower. The two combined incomes could be counted for qualification purposes.Keep in mind that all debts would be included for all borrowers when determining debt to income ratios. So her living expenses, your current mortgage as well as the new mortgage, along with all other credit debt would count against the ratios. If the income is sufficient to handle this it would be possible to get a loan. I would find a bank that offers HELOC's and consult with them. The guidelines are tougher than they used to be but mainly in regards to Loan to value. Since she owns it fee and clear there is room to get a loan. They may cap you at 60-70% of the value maybe as much as 80% - hopefully that is enough and will help out until you are able to sell your home.

Good Luck

B

Share this post


Link to post
Share on other sites

Wow, well this is getting more complicated than I thought. We are meeting with a mortgage guy this evening in relation to our own loan to purchase her house, so I guess we could ask him.

Share this post


Link to post
Share on other sites

You can also get a reverse mortgage. You do not need any income to qualify and that should allow you to hold out until you sell your primary residence. Then you can refinance that reverse mortgage to a regular mortgage.

Share this post


Link to post
Share on other sites

Well, we can't get a reverse mortgage. And I thought the home had to be the primary residence of the owner to get a RM... but my MIL is now living at the assisted living, so doesn't that disquality her for the RM?

 

BTW... thanks everyone for their input.

Share this post


Link to post
Share on other sites

If she has social security that income would be usable. It is a very complicated scenario - and will take some effort on your part. You should ask around to friends and family and see if they know of anyone in the area that is experienced in these types of difficult scenarios. You wouldn't want to get stuck working with someone that didn't know what they were doing. I had thought about the reverse Mortgage angle as well but that last I had checked I believe the borrower must reside in the home to qualify for one. I may be wrong on that as I have not looked at the guidelines for one in a while. DBleynis may know better?

Share this post


Link to post
Share on other sites

I am also rough on reverse mortgages. But I am agree with Brian. She must reside there, although theoretically with the $ you can take with the cash out you can probably get her assisted living in that residence so she doesn't have to live in the nursing home. Once again my knowledge of reverse mortgages is very minimal.

 

 

 

 

If she has social security that income would be usable. It is a very complicated scenario - and will take some effort on your part. You should ask around to friends and family and see if they know of anyone in the area that is experienced in these types of difficult scenarios. You wouldn't want to get stuck working with someone that didn't know what they were doing. I had thought about the reverse Mortgage angle as well but that last I had checked I believe the borrower must reside in the home to qualify for one. I may be wrong on that as I have not looked at the guidelines for one in a while. DBleynis may know better?

Share this post


Link to post
Share on other sites

DBleynis...The senerio above would mean moving her back into her house again, and that is not an option at this point.

 

So actually, the best thing at this point is hoping her money holds out till we can sell our house.... or just forget about purchasing her house and just sell it to someone else.

 

The reason we want to purchase is because we are essentially going to end up practially giving it away to another buyer, where if we could buy it, the house has a lot of potential to be a really nice house with some remodeling.

Share this post


Link to post
Share on other sites

She must live in the home as her primary residence to use a Reverse Mortgage, so that is out. As for the HELOC, just talk to a loan officer and bring along the amount of her monthly social security, so they can run some rough numbers for you. Depending on the size of the loan, she may qualify with the SSI.

 

I think you are probably going to run into occupancy issues, though, and possibly even issues with the fact that she's in the assisted living place in the first place. With your husband being power of attorney, it's just a really complicated scenario, that a lot of places might not want to touch the loan in this conservative lending environment. Like Brian said, talk to someone with experience. A local bank might be your best bet.

Share this post


Link to post
Share on other sites

The last post in this topic was posted 3465 days ago. 

 

We strongly encourage you to start a new post instead of replying to this one.

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  




  • Member Statistics

    • Total Members
      179,966
    • Most Online
      2,046

    Newest Member
    branch
    Joined

About Us

Since 2003, creditboards.com has helped thousands of people repair their credit, force abusive collection agents to follow the law, ensure proper reporting by credit reporting agencies, and provided financial education to help avoid the pitfalls that can lead to negative tradelines.
×
×
  • Create New...

Important Information

Guidelines