U.S. CitiesCity-Data Forum Index
Covid-19 Information Page
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 10-12-2018, 08:37 PM
 
7 posts, read 2,854 times
Reputation: 20

Advertisements

Hi there. I'm a first time home buyer with a question - I want to buy a home in Louisiana, where I will be a resident and live in the home. A family member who lives out-of-state has offered to become a non-occupant co-investor. He would put down 1/2 the worth of the house as a downpayment, I would get the rest through a mortgage on my own.

In this scenario, my family member would be on the title, but not on the mortgage. However, he will subordinate his interest in the property to the mortgage holder. In other words, if we ever sold the house, the mortgage company would be paid before he was, but if the property was worth less then the mortgage balance they could not come after him for the balance.

My question is this: If we have an arrangement like this, can I still obtain a mortgage for the balance as a owner-occupant resident? He has helped people set this up before and this was not a problem. However, never in Louisiana. When I talked to the lender, he seemed to have never heard of such a situation and stated that if my family member is not on the note, it would not be possible.

Thanks in advance for any information!
Rate this post positively Reply With Quote Quick reply to this message

 
Old 10-13-2018, 09:05 AM
 
Location: Phoenix, AZ
2,816 posts, read 1,321,125 times
Reputation: 7188
The whole idea is just plain stupid. Never do business with family. Family will ********* worse than strangers. And never let anybody else OWN your house. Once he's on the deed YOU can't get him off unless he consents and signs the deed over to you. When you sell you will need his signature. If there is no money in it for him he won't sign. Don't be naïve. If you go through with this you will regret it. Guaranteed.


Quote:
He has helped people set this up before and this was not a problem.

Is that what he says? I wonder what the people he "helped" would say.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-13-2018, 12:41 PM
 
7 posts, read 2,854 times
Reputation: 20
@ adjusterjack,

The family member I speak of is in finance and is someone I've trusted with my finances. They have helped me and many others in many ways many times. I would trust them with my life. However, that is not what I am doing here. I am going into this with eyes open. We are working together looking at multiple options (me buying alone vs. them as a co-investor). We will run the numbers, and I am working with my own agent and lender, to decide which is the best option for me.

This is my first time on this site. I appreciate that you replied to my post. However, I guess I should have been more specific in what I was asking. I am not asking for opinions on whether the idea is a good one or not. I'm looking for advice on the feasibility of it (i.e., adherence to rules, regulations, laws) from those who have experience with this kind of arrangement in Louisianna or elsewhere. The fact that this is a family member is just by way of background. I would imagine that the feasibility of the arrangement (whether it could be done or not) would be the same if it was a non-family member who was investing.

I also want to say that I find your statement about the whole idea being stupid rude and unsolicited. People do business with family all the time. There are risks for sure. However, if they go into it with their eyes open (which is what I'm doing here) it can work out great. I don't want this to be a debate about that issue. I'm just trying to get information on the feasibility of the scenario I described in my initial post.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-13-2018, 07:47 PM
 
Location: Boise
659 posts, read 656,698 times
Reputation: 1442
It sounds like a tenants in common vesting on the title. Not real common, but doable. Find a local lender who understands this aspect of your deal.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-13-2018, 10:27 PM
 
16,081 posts, read 21,281,568 times
Reputation: 26456
I won't pretend to know mortgages but I can appreciate that you took a sometime problem on an open forum and responded appropriately. Welcome to City Data.

To respond to your original post....I agree with mortgageboss.....shop around until you find the right lender.
Have you asked your other relatives what mortgage companies they used?
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-15-2018, 03:52 AM
 
Location: Cary, NC
36,090 posts, read 62,904,437 times
Reputation: 35803
Quote:
Originally Posted by SLD2018 View Post
Hi there. I'm a first time home buyer with a question - I want to buy a home in Louisiana, where I will be a resident and live in the home. A family member who lives out-of-state has offered to become a non-occupant co-investor. He would put down 1/2 the worth of the house as a downpayment, I would get the rest through a mortgage on my own.

In this scenario, my family member would be on the title, but not on the mortgage. However, he will subordinate his interest in the property to the mortgage holder. In other words, if we ever sold the house, the mortgage company would be paid before he was, but if the property was worth less then the mortgage balance they could not come after him for the balance.

My question is this: If we have an arrangement like this, can I still obtain a mortgage for the balance as a owner-occupant resident? He has helped people set this up before and this was not a problem. However, never in Louisiana. When I talked to the lender, he seemed to have never heard of such a situation and stated that if my family member is not on the note, it would not be possible.

Thanks in advance for any information!
I think you want to talk to a local community bank who will not want to resell the loan.
Or a mortgage broker who works with many investors.

Ask your relative what sort of lenders he has worked with in this arrangement in the past. I bet it is not big online lenders with cookie cutter offerings.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-15-2018, 06:34 AM
 
Location: MID ATLANTIC
8,140 posts, read 19,992,551 times
Reputation: 9382
A mortgage always takes priority before profits are paid.

You just need an attorney to draw up an agreement between the two of you. We see this all the time, it's called a shared equity agreement. This is between you, your relative and attorney. The lender isn't involved with how you two split up the deed; as long as it is in your individual names and not an LLC.
Rate this post positively Reply With Quote Quick reply to this message
 
Old 10-15-2018, 02:10 PM
 
7 posts, read 2,854 times
Reputation: 20
Thank you all so much!

Yes, we are working with a local lender, who we spoke to recently. Once things were clarified he thought this arrangement should not be problematic, as long as I can be the primary resident. If that is not the case, other factors come into play such as whether or not the home is categorized as a single or multi-family unit during the appraisal process.

Next steps for me include looking into the various loan, incentive and tax programs to see the implications of this option vs. me as a single buyer.

Thank you all for your comments. They've been very helpful. Keep them coming if you have more!
Rate this post positively Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

© 2005-2020, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Contact Us - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 - Top