What is the best way to buy someone to practice? Refinancing or getting a loan?

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My brother and I went together in a home loan. He has since married and I want to continue living at home. The mortgage is in my name but both names on the deed. Would you refinance or get a loan as a credit union to be the best option?

  1. Reply
    February 22, 2011 at 8:48 am

    His name is not on the mortgage so no need to refinance. both of you go down to the County Office of Deeds and Records. The staff will assist you with the paperwork to remove his name from the deed.

  2. Reply
    Steve D
    February 22, 2011 at 9:05 am

    Either one will work. You will probably get a better rate re-financing since the house will act as collateral which lowers the risk for the lender. Since you are the only one on the mortgage, the other option is to settle on a dollar figure with your brother and do a private loan (you pay him X amount of dollars per month until the amount is paid plus any interest you both agree on – you can use a mortgage calculator on-line to figure out the payments). This has the advantage of keeping the debt off your credit report and lowering your reported debt-to-income ratio. It has the disadvantage of not building credit through consistent on-time payments, although since you have a mortgage, I would guess this may not be a concern. If you go the private route, your brother can sign a quitclaim over to you so you can transfer full ownership into your name. Saves a lot of the closing costs, etc. of a re-finance.

  3. Reply
    February 22, 2011 at 9:16 am

    You don’t need to refinance if you are the only one on the mortgage, unless you have to pay your brother for his share of the Equity in the property and don’t have the money. If you can pay him in cash, or in payments to him, and he will Quit Claim Deed the home from your joint names to just your name, that would be simplest. You might be able to get a Home Equity Loan on his share of the equity and pay him.

  4. Reply
    February 22, 2011 at 9:54 am

    If your interest rate is above 4.5%, you may want to take advantage of a refinance and kill 2 birds with one stone. You have not given any details such as the value of the property or the amount of the buyout so any advice beyond that would not be informed advice.

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