Financing in San Jose>Question Details

Sage Bear, Other/Just Looking in San Jose, CA

Can someone not on the title anymore be a co-signer on a HELOC for a property in good standing?

Asked by Sage Bear, San Jose, CA Wed Feb 20, 2013

Title is under my name & my sister's name, I am trying to cash my sister out (she agrees) with a certain amount of money agreed upon. I would like to know if someone (a 3rd person) could be a co-signer on a HELOC loan so that I could provide the cash to my sister. The 3rd person is not interested on being on the title. This is the scenario. Please advise if this could be done. Thanks.

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Sage Bear:

The short answer is no. The best thing to do is to see if you are eligible to cash her out with a new first trust deed fixed rate re-finance. First, this is cheaper credit in the long term. Second the term of the loan is structured so you don't have suddenly increased payments starting your tenth or 15th year with that you would have with the HELOC. Third, if your current loan was created before May 2009, you may be eligible for several government programs which will turn a blind eye to some loan qualification issues. With an FHA loan, you could use a co-signer. If we can do this without an FHA loan, then you would not need a co-signer and your life would be much easier in the longer term.

Please give me a call at 408-639-0211 to discuss how these may be applied to your situation. We would need to discuss your financial particulars, which are bestnot to disclose on such a public forum as Trulia.

Mitchell Pearce
408-639-0211
mitchell@handsonrealtor.com
1 vote Thank Flag Link Wed Feb 20, 2013
Hi Sage Bear,

Most banks and credit unions do not allow non-occupant co-borrowers on HELOC's. Credit unions tend to have more liberal underwriting guidelines for HELOC's, so I suggest you call Patelco or KeyPoint Credit Union.

Best wishes,

Elva A. Wormley
Mortgage Consultant
Office (408) 615-8500
C2 Financial Corporation
2845 Moorpark Avenue, Suite 209
San Jose, CA 95128
NMLS #331981
1 vote Thank Flag Link Wed Feb 20, 2013
Even if you add this third party to the title, you will run into a continuity of ownership issue on this..
The borrower must be on title for a minimum of 12 months before being considered an owner.

You can, however, purchase the property from your sister.
She can gift you a portion of the equity (20% down) and you can take out the loan for the rest of her payout.

IE:

Purchase price: $300k
Max loan: $240k

Need a loan for $100k to buy out siste already owe $140k.
New loan amount $140 to include $140k payoff and $100k buy out.

I can clarify this for you.
Shoot me an email cgravelle@diversifiedmg.com we can discuss over phone or in person.
I am located in Fremont.
0 votes Thank Flag Link Wed Feb 20, 2013
Thank you Sage Bear:

I do not know of any banks that will accept a co borrower who is not also on title.

However if you are willing to accept money (at a higher interest rate) from a private lender, a third party who is willing to guarantee the loan although they are not on title might be able to help you get financing that you could not get otherwise.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
DRE#00901872
.
0 votes Thank Flag Link Wed Feb 20, 2013
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