Will I be able to get a mortgage or construction loan when I only own 50% of property?

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My sister and I are co-owners of a house. I would like to take out a mortgage to improve the house and am willing to assume responsibility for repayment, etc. Will it be possible for me to secure the loan in my name only and use the property has collateral (with my sister’s consent).

4 Comments
  1. Reply
    Rebecca
    April 29, 2011 at 10:45 pm

    Perhaps but you need to just call local Lender’s and ask the question. I suspect it will be a lot more difficult to find a lender in that type of a situation.

  2. Reply
    John M
    April 29, 2011 at 11:31 pm

    The key to this deal would be the language used in the ownership papers and any existing mortgages. If you own the house free and clear, your sister could just require an agreement between the two of you so that in the event you fail to make payments on the loan, she gets the agreed upon share of your portion of ownership, such that she can buy you out and pay off your loan. If she is not able to qualify for a loan to buy out that portion of the property in the event you default, she should not agree to the deal.

    The same attorney who handled your purchase or property transfer could advise you on how to do this.

  3. Reply
    wizjp
    April 30, 2011 at 12:15 am

    uh….this is simple. Two owners; 2 signatures. Period.

    No matter how you hold title. Each owner must pledge his fee simple ownership interest in order for a property to be held as security for a loan. In many but not all cases, the lender will want both owners to sign the mortgage; only your lender can say aboout that.

  4. Reply
    drwloans
    April 30, 2011 at 1:01 am

    Yes, she can be on the deed but not on the mortgage. She will have to be at the closing.

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