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.
A person is currently paying a lot for a mortgage and wants to get a lower payment. However, this person cannot refinance because their credit is not so good, but has relatives with good credit.
Some options I have heard of are deeding it over to a relative and having that relative refinance, do a gift of equity purchase between relatives, or just have relatives help with the mortgage in the first place.
Actually the relative would not refinance it would be a new mortgage. Most loans have a due on sale clause which gets triggered so that loan would need to be paid in full upon the change of the deed. You would need to calculate the amounts they would pay in closing costs, etc and see if it is worth it. The owner also needs to understand that the relatives would get the interest deduction on their taxes and they would not.
I would talk with a local lender. It might make more sense to have them help with the loan, while the owner gets their credit cleaned up and then can refinance themselves. A local mortgage broker can see what needs to be done to get their credit to a better place.
If my relative had bad credit, I wouldn't take on the risk of their mortgage by refinancing in my name... They have bad credit for a reason, and I don't want or need their added risk.
This situation screams future drama to me... and I'd want to stay clear.
It sounds to me like the poor credit person had made another unwise financial decision to buy a home that he/she cannot afford.
My 2 cents... never lend a friend of family money unless you're comfortable giving that as a gift. If you want to help the person out just gift them some cash or allow for a monthly direct deposit from your account to theirs. That is, unless you want to own their home and potentially lose a relationship...
Long story short, the bank admitted they made a mistake which made my relative's credit appear bad. They are in the process of getting it cleaned up, but it seems like it is going to take some time.
Long story short, the bank admitted they made a mistake which made my relative's credit appear bad. They are in the process of getting it cleaned up, but it seems like it is going to take some time.
Call me a skeptic, but I see red flags popping up everywhere.
Call me a skeptic, but I see red flags popping up everywhere.
Me too.
If there are inaccuracies on the credit reports, the bank, as a Furnisher of Information, has legal obligations to stop reporting erroneous information, per Section 623 of the Fair Credit Reporting Act. In addition, CRA (consumer reporting agencies) have obligations to investigate all disputes within a limited time period (30 days from the day the CRA receives the dispute, or 45 days if the consumer later provides relevant information to the CRA).
Location: Georgia, on the Florida line, right above Tallahassee
10,471 posts, read 15,847,149 times
Reputation: 6438
A person is currently paying a lot for a mortgage and wants to get a lower payment. However, this person cannot refinance because their credit is not so good, but has relatives with good credit.
Some options I have heard of are deeding it over to a relative and having that relative refinance, do a gift of equity purchase between relatives, or just have relatives help with the mortgage in the first place.
Any thoughts?
Speaking of relatives "helping" with the mortgage? How long would the relatives be expected/asked to "help" with the mortgage?
Long story short, the bank admitted they made a mistake which made my relative's credit appear bad. They are in the process of getting it cleaned up, but it seems like it is going to take some time.
Have this person get a letter from their bank (stating that the bank made an error) to take to their creditor/lender and let the creditor/lender and the bank work it out.
If they are giving you the sob story.....iId be asking to see that letter, too. verify.
I'm sorry, but I think it would be pretty stupid to assume the debt of someone who has bad credit. Doesn't matter if it is family or not. I'd reckon past behavior is a good indicator of future behavior.
What is the reason that they can't afford their payments? Maybe there is more to the story?
And why isn't this in the Mortgage forum.................
Really bad idea to get relatives involved in mortage/financial issues.
Also wrong to ask relatives to help when it could hurt their credit or what if relatives what to make a big purchase but can't because they have the mortgage thing they are helping out with. Instead of asking relatives to spend their hard-earned money to help out, the original owners of the expensive mortage can try some other things:
Get a 2nd job. Give up cable television. Give up eating out. Give up alcohol, sweets, cigerettes (as applicable - anything not needed). Give up their DSL or broadban plan and use the computers at the library.
Give up eating out. Walk or ride bikes where possible instead of drivingf. Do all this until the bank mix-up is fixed then refinance. In the future, don't get a big loan if it's going to be hard to pay.
Or Sell the house and get a smaller one.
I know how to lower their monthly payment. Sell the house or, if they are underwater, mail the keys back to the bank, and rent an equivalent house for half the amount they're paying now.
There was a reason that banks used to have underwriting standards... And there was a reason that that banks used to verify credit and income... and there was a reason that banks used to require downpayments... Oh who am I kidding, that stuff is so old-fashioned!
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.
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.
