I have a joint mortgage and HELOC (with me as primary borrower) with my partner. Recently we had an enormous flood in the basement and we need to get the basement water-proofed. We have built up sufficient equity in the home that I thought that getting a home equity loan to get the work done would not be a problem. As my partner is currently unemployed (but was not at the time we took out the mortgage) I thought that I would just apply for it in my name. My credit union told me that because he is on the deed we would have to apply jointly. Obviously we will have little likelihood of getting approved for the loan as he has no income, no savings and no liquid assets to speak of. I am wondering if there is any way we van get around this situation? Will all lenders require us to apply jointly as he is on the house deed? Also, we have been tempted by lower interest rates and the possibility to refinance but again I have been scared to approach our mortgage lender as we never told them that he lost his job â?? it has not affected us making our mortgage payments on time every month. Is this a requirement and if so can we be penalized (by a higher interest rate) if they find out his employment status has changed? Any advice would be greatly appreciated. Thanks, Sinead
your CU is smoking crack! all your partner would need to do (provided you qualify on your own) is sign the mortgage, and the right to cancel. they have to sign these to authorize the lien on the property since they have legal rights to the property. usbank has some good rates, so does TCF. BTW - neither one i work for!!! refinancing isn't always smart when you figure in closing costs. the interest rate may be lower, but you may lose money. again, it would depend on if you would qualify on your own. they wouldn't care if your partner was employed or not if you can qualify without them.
Your partner does NOT have to take out the loan with you. Your partner will need to sign off allowing the lien against your property. Howver, the repayment ability will be solely based upon your income, and all the inherent ratios used in lending approval processes. For example, I did this same process with my wife. I took out a HELOC in my name only. I did this because of a great rate, but my wife's scores would not qualify us for the loan. I was approved, but they limited the amount of the HELOC due to basing repayment ability ratios solely on my income. As a note, they included the entire mortgage payments in my ability to repay also. So, be aware, you can apply only in your name, but you may be limited in the amount you borrow. Good Luck
