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Buying or Selling a Home/Buying some of my mothers house to sort out my debt??

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Expert: John Hendricks - 5/27/2008


Question
Okay, Im completely confused about this...
Basically im in about 13k worth of debt, I have an awful rating, cant consolidate, so im pretty much trapped with high interest rate loans and about a thousand outgoings.
My mother and father came up with this idea.. they said why dont I buy 15k of their house, put my name on the mortgage, when they get the 15k back that ive bought it off them for they will give that to me to pay off my debts, then I will just be paying a 15k mortgage over 20 years?? Which will work out 10 times cheaper than my high interest rate loans??
They have 30k left on their mortgage and the house is worth about 100k.
Is this even a real idea?? is it even possible??
If so will the bank even give me a mortgage of 15k with my awful rating and with the amount of money I owe already?
And would it be obvious to tell them the plan of what we are trying to do?

Let me know ASAP please as we have a meeting with the Yorkshire bank tomorrow and I dont want to be completely embarassed when they laugh at what we are asking for.

Thanks

Answer
Dear Matisse;

Thanks for your question… Unfortunately, you would not be allowed to buy into their loan for the home. The mortgage broker would have to refinance the entire property including your $15K you would like to obtain, for a grand total of $45K if I understand your question correctly. You would be allowed to be added to the deed by way of a quit claim. By doing this all parties would have to sign first before the refinance actually would take place. Your mother, father and you would be co-owners of the property and would all have to qualify for the loan.

Instead of going to the bank directly, you may want to consult with a mortgage broker. A good mortgage broker has a number of investors they can pick from to get you a loan depending on all of your credit scores, debt to earnings ratio, etc… A bank is one dimensional, meaning they have their product to sell only.  

I am a California Realtor and not a mortgage broker… Buying a house is one thing, giving financial information on mortgages is another. I would highly recommend you contact the mortgage broker, tell them your story and what you are trying to accomplish before you enter into any agreements or add your name to the deed. They will lead you in the direction which is best for you and your family. I would get the names of at least 2, no more than 3 mortgage brokers from people you trust. Don’t sign anything, or give any money for their opinion. The only charge initially would be for a credit report approximately $50 for each of you. Only have one credit report ordered by the selected broker. Every time you order a credit report it drops your credit scores. You don’t want that lower score when applying for a loan. Good luck, I hope this answered your question…

Warmest Regards;
John Hendricks  

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John Hendricks

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As a California Realtor for 23 years practicing in Marin and Sonoma Counties, it is now time to provide counsel through AllExperts.com to those who need advise in real estate. My knowledge and experience includes a wide range of resale residential real estate purchases, new home sales, income related investment properties involved in 1031 exchanges, and land. Let me help you in any of these areas...

Experience

John Hendricks has established himself as one of Marin & Sonoma Counties premier Realtors. A native Californian, John is a well-known and respected Realtor in both Marin & Sonoma Counties who has resided in the Northbay since 1976. John began his real estate career in 1986, and since then has distinguished himself as one or Northern California's top producing Realtors. Before joining Frank Howard Allen Realtors, John was an associate of the Prudential California Realty from 1990-1992 where his outstanding sales achievements earned him one of the company's highest honors, the prestigious "President's Circle Membership", presented to the top 2% of associates for sales and earning excellence. Since his association with the highly regarded Frank Howard Allen Realtors in 1992, John has once again established himself as one of his company's Top 10 Producing Realtors in Marin & Sonoma Counties for the years 1993 through 2007 and now in 2008. Five continuous years of outstanding performance has now allowed John to join 15 other Realtors in the prestigious "Lifetime Hall of Fame" for Frank Howard Allen Realtors. John established a group of professional individuals who specialize in a variety of areas in real estate called, 'Lundmark-Hendricks Fine Homes' This group of professionals are dedicated to the success of representing clients with the greatest amount of care and service when either buying or selling real estate.

Organizations
California Association of Realtors National Association of Realtors

Education/Credentials
Upon Request...

Awards and Honors
Frank Howard Allen Realtors "Hall of Fame Member" Chairman's Circle for 10 consecutive years

Past/Present Clients
Joe Louis & Sharon Sigurdson We want to thank you again for your excellent representation of interests during the recent purchase of our home in Petaluma as well as the sell of our home in Mill Valley. We had the unusual pleasure of working with you during the last year both as sellers and buyers. We felt that our interests were always paramount and that we received a very fair price for the sale of the Mill Valley house as well as our purchase of our new home. This speaks particularly well of you, because of the recent unstable and chaotic real estate market. Will Finke "Quite frankly, we came out of a very difficult situation, which time does not allow elaborating on. This was one of the greatest experiences of our lives as clients. John Hendricks is one of the top businessmen I have ever met." Bruce & Nancy Rosentreter "I chose John Hendricks to sell my house. I picked him because I thought he was professional, aggressive, and that he could get top dollar for my house. He fulfilled my expectations completely." Joy Schuelke "Since we were trying to sell a high end home in a very tough market, and in the middle of a very rainy winter, the prospects seemed quite bleak. I was convinced at the time, and am even more so now, that without John's tenure, patience, and tenacity, we would have not been able to move the property." Lynn McCarthy "I cannot stress strongly enough how impressed I was with the service provided to me by John and his group. Throughout the entire transaction, John was always available, always forthcoming with excellent advice based on his years of experience, and always willing to put in the extra effort to make this a positive experience for me. I feel lucky to have had the experience of working with him." Lea Lieurance-Turk "Thank you John for your outstanding real estate services for the past 5 years I have known you. You have made my dreams come true as far as selling and buying property."
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