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
I would expect that if he is on the deed, you would have to apply jointly, since the lender's lien on the property is the security for the loan, and all owners would have to approve to allow the lien to be filed. Whether his lack of income would affect your ability to get a loan would probably depend on what your total income and debt is. Husbands and wives take out loans all the time with only one income. Whether it is your income, or his, you have to have enough cash flow to cover the new loan payments, along with your existing obligations, and the lender must be comfortable with both your debt to income, and with their loan to value ratio. It might also help that the loan is being used to improve or repair the lender's security. A lender or mortgage broker could give you those figures. Your own calculations on your ability to cover your obligations is as important as whether a lender will approve a loan.
