Posted on: 29th May, 2011 04:38 pm
hello everyone. this is my first post. i live in maryland.
at the current time, my father is terminal. my sister is the current power of attorney and the will states that my sister and i are to get 1/2 of the estate each. we are all on good terms with each other.
the idea to buy out my sister was at first thought to be a moot point; that i couldn't afford it. the home i'm in was discharged in bankruptcy in 2008 and i want no parts of it. i am neither on the deed nor on the mortgage. my idea is to get a loan in the amount of $100,000, give that to my sister; she would keep $$ liquid assets from the estate and coupled with money i hold from my husband's death, which would equal half of the property value for a total of 150k.
however, although i wasn't on the deed or mortgage to the house at the time of the bankruptcy, i was on the bankruptcy. although i pay the auto payment and have two very small credit cards in my name, my credit score is only in the 630 range. my dad is closer to 800. a friend suggested that my dad get a home equity loan while he is still avlie, put me on the deed as a joint tenant and the equity loan gets disbursed to my sister and the additional funds go to my sister as previously mentioned. however, another person said that when my father passes, the home equity loan would become payable from the estate. would i go on the loan as a responsible party or how can it be that the loan comes to me as my responsibility at the time of his death? i know the rate my father would get would be much lower than what i would get with my tarnished credit.
everyone wants this to happen and work out, but of course my sister wants to make sure that everything works out correctly. any help or suggestions you could give me would be helpful. thank you.
at the current time, my father is terminal. my sister is the current power of attorney and the will states that my sister and i are to get 1/2 of the estate each. we are all on good terms with each other.
the idea to buy out my sister was at first thought to be a moot point; that i couldn't afford it. the home i'm in was discharged in bankruptcy in 2008 and i want no parts of it. i am neither on the deed nor on the mortgage. my idea is to get a loan in the amount of $100,000, give that to my sister; she would keep $$ liquid assets from the estate and coupled with money i hold from my husband's death, which would equal half of the property value for a total of 150k.
however, although i wasn't on the deed or mortgage to the house at the time of the bankruptcy, i was on the bankruptcy. although i pay the auto payment and have two very small credit cards in my name, my credit score is only in the 630 range. my dad is closer to 800. a friend suggested that my dad get a home equity loan while he is still avlie, put me on the deed as a joint tenant and the equity loan gets disbursed to my sister and the additional funds go to my sister as previously mentioned. however, another person said that when my father passes, the home equity loan would become payable from the estate. would i go on the loan as a responsible party or how can it be that the loan comes to me as my responsibility at the time of his death? i know the rate my father would get would be much lower than what i would get with my tarnished credit.
everyone wants this to happen and work out, but of course my sister wants to make sure that everything works out correctly. any help or suggestions you could give me would be helpful. thank you.
Hi synonymouswithanonymous!
Welcome to forums!
It is true that after your father's death, the lender can sell off your father's property in order to recover the home equity loan. If your name is not on the loan, then you won't be liable for paying the mortgage. However, after your father's death, you can refinance the loan in your name and pay off the debt.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is true that after your father's death, the lender can sell off your father's property in order to recover the home equity loan. If your name is not on the loan, then you won't be liable for paying the mortgage. However, after your father's death, you can refinance the loan in your name and pay off the debt.
Feel free to ask if you've further queries.
Sussane
Hello Sussane. I made sure to add my name, Michele, since my email tends to be a bit long!
Thank you very much for replying. I think the issue of trying to utilize my dad's good credit rate was a good thought, but I still think I might try to just secure a loan to purchase the property. I think that the 30K coming to the estate and the 20K that I have in my possession will work, but my credit worthiness and income are definitely going to be a factor. It would be nice to see this scenario work. The house is beautiful and far more that I would ever be able to buy with the proceeds of the estate. Plus, everyone in the family would like to see me stay in the home, 'keep it in the family'. I will continue to peruse my options.
Thank you very much for replying. I think the issue of trying to utilize my dad's good credit rate was a good thought, but I still think I might try to just secure a loan to purchase the property. I think that the 30K coming to the estate and the 20K that I have in my possession will work, but my credit worthiness and income are definitely going to be a factor. It would be nice to see this scenario work. The house is beautiful and far more that I would ever be able to buy with the proceeds of the estate. Plus, everyone in the family would like to see me stay in the home, 'keep it in the family'. I will continue to peruse my options.
Hi Michele,
You can definitely continue to pursue your options. It will be solely your discretion. If you wish to save your father's property, then you need to refinance the loan and pay the debts on time.
Thanks
You can definitely continue to pursue your options. It will be solely your discretion. If you wish to save your father's property, then you need to refinance the loan and pay the debts on time.
Thanks
Michele, there is no instance in which a lender can "sell off" a home to pay off an existing mortgage. A foreclosure, of course, can take place, but a lender is not an owner of the real estate, and therefore has no selling rights. As long as a mortgage on such property is kept up to date, for example, the lender (unless it knows about a death) will simply keep the loan on its books.
By all means, strive to purchase the home from the estate. You may even find a lender, if you need one, who will be willing to grant you a loan despite the bankruptcy. Such a lender would be one that is not participating in secondary market adventures (yes, everyone...I did say "adventures"). Community banks, credit unions, etc. will often look upon a borrower such as you in a favorable way - they're worth checking out from that standpoint.
But upon your Dad's death, any loan outstanding would be due and payable (unless you're a coborrower); that still doesn't provide a lender any right to sell the home. If you and he were joint borrowers, all you'd need to do is continue to make payments on any such loan.
The first step you ought to take is to seek out an estate attorney, who might be willing to guide you through the steps you'd need to take - presumably, there's already one involved with your Dad's affairs anyway, I hope.
By all means, strive to purchase the home from the estate. You may even find a lender, if you need one, who will be willing to grant you a loan despite the bankruptcy. Such a lender would be one that is not participating in secondary market adventures (yes, everyone...I did say "adventures"). Community banks, credit unions, etc. will often look upon a borrower such as you in a favorable way - they're worth checking out from that standpoint.
But upon your Dad's death, any loan outstanding would be due and payable (unless you're a coborrower); that still doesn't provide a lender any right to sell the home. If you and he were joint borrowers, all you'd need to do is continue to make payments on any such loan.
The first step you ought to take is to seek out an estate attorney, who might be willing to guide you through the steps you'd need to take - presumably, there's already one involved with your Dad's affairs anyway, I hope.
