I have a TX home mortgage loan in my name, and my friend’s name is included on the deed, what if we split up?

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I have been making the payments each month myself- my friend is unable to help pay right now.
what do I need to do to protect my interests in case we split up? we are not married. He helped pay for the downpayment and some home improvements.

My parents are giving me their current house and building a new one. The house needs some improvements (Kitchen, Bath, Carpets, etc) what is the best loan to get? I currently rent so I don’t have a mortgage. Do I get a home equity loan, first mortgage, home improvement loan? Please help.

6 Comments
  1. Reply
    acermill
    February 18, 2011 at 1:07 am

    Not a bright move on YOUR part. YOU alone are responsible for the mortgage payments, since you alone are the mortgage holder. However, since your ‘friend’ is on the deed, he is a half owner of the property, and is entitled to half of any profit you make on the sale of the property. If you LOSE money on the sale, YOU get to pay the shortfall. There is nothing YOU can do to ‘protect your interests’ unless your friend agrees to sign a quit claim deed giving you full ownership.

    Next time you decide to do something along these lines, seek legal advice before you charge forward.

  2. Reply
    Landlord
    February 18, 2011 at 1:28 am

    You really can’t do much. He owns half the house, it does not matter one ioda how it is paid for.

  3. Reply
    *havin fun in the sun*
    February 18, 2011 at 2:17 am

    home improvement loan.

  4. Reply
    Steve D
    February 18, 2011 at 2:44 am

    Shop around for the lowest rate – any of the three will do – the mortgage will probably have the lowest rate, a HELOC will have a slightly higher rate, but is more flexible since you only borrow what you are going to use.

  5. Reply
    Jason
    February 18, 2011 at 3:31 am

    A HELOC or Home Equity Line of Credit

  6. Reply
    efflandt
    February 18, 2011 at 4:12 am

    It depends how well you can handle finances. Shop around and see what types of loans are available. A home equity loan or home improvement loan might be somewhat higher interest rate, but lower closing costs, than a regular mortgage. Rates could be fixed or variable and they will tell you what the payments will be, which would remain fixed with a fixed rate or could vary with variable rate, to pay it off by the end of the term you select.

    A home equity line of credit (HELOC) usually has lower interest rate than a home equity loan with little or no closing costs (which can affect interest rate). You borrow what you need from it when you need it and only pay interest on the amount of it you are using. But the minimum payment is typically just variable interest (unless you lock in a fixed rate for a specific amount you borrowed), so you need to pay more than that on your own to pay down the principal, or you might find yourself scrambling in the end to either come up with the money or refinance.

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