I'm currently planning to sell my existing home that is in my name and put down 30k-50k on a new home in a girlfriend's name. I'm currently self employed and cannot put my name on the new loan or we would be denied. What is the legal document we both could sign that will ensure I get my down payment back and at least 4 months move out notice in the event the crap hits the fan? Or is there a way to put my name on the home as part owner but not on the loan itself?
Welcome to the Real Estate Boards, strandedpirate! Hope you realize that most of us tell it like it is here, never give legal advice and try to give people a "heads-up" if we see that a poster might be making a "dumb" move.
Well, selling your current home, putting the equity you have now into a new purchase in someone else's name would qualify as a dumb move.
But, I think you already know that....
If you are determined to go ahead with such a stupid idea, there are a few ways to protect yourself ~ all of which require the assistance of a well-qualified real estate attorney although it might be complicated and rack up some fees.
You can loan the money to your girlfriend with the advancement of the down-payment being secured as a second on the purchase price to secure your position ~ very complicated but it can be done and with 30-50K involved ~ well worth the costs involved.
OR, you can forget the whole scheme all together and start over. I recommend the second alternative - good luck and post back.
IMHO, If you are asking this question, I think you know the answer, pretty much what Idaho wrote. There are some who will post on there their moral outrage at the thought of 2 people purchasing a home together without the benefit of marriage. :eyeroll: That is not my attitude.
It really isn't that complicated, but you do need a real estate attorney.
As Idaho suggested you could provide the down payment as a second mortgage on the property. Your attorney would draw up the paperwork and you would be in 2nd position on the property.
There are couple of other options all determined by the state you live in. You need a real estate attorney to help determine the best option for you and your girl friend. You might be loaning the cash up front - she is the one on the hook for 30 years. Does she even know you have this particular concern???
Most important is to be sure your name is on the deed. You do not need to be on the mortgage to be added to the deed.
I know the real estate market is turning around and money is cheap. I would recommend you lease for a year (the market isn't going to change that fast) and then decide what works. That is my Dear Abby speech.This message has been edited. Last edited by: Charming,
Recommend passing on this deal for financial reasons.
If your gf lacks downpayment funds, it's quite possible a lender won't approve a loan. If she is on the bubble WRT qualifying, they won't approve of her taking on add'l debt in the form of a downpayment loan, recorded against the property as a second mortgage.
They will most likely require bank statements from her to verify the source of her funds. They might also require a gift letter from you. BTW, she could use that (worst case scenario) to avoid repayment of your loan.
If you conceal the deal from her lender and later record a second mortgage against the property, it would probably be considered a technical (nonfinancial) default under the loan documents. Worst case scenario, the lender could call the loan.
If you'd like to live with her to share expenses, why not have her obtain* and fund her own low-downpayment loan, e.g. FHA, if possible? You may pay her a reasonable amount of monthly rent. Later, if things change, you can either easily remove yourself from the situation (that is, move out) or negotiate an ownership interest. In the meantime, you've limited your risk.
It's all JMHO and best of luck to you -
*P.S. Recommend she obtains that loan on her own, i.e. without consideration of any monthly rental income from you. That way, if you exit, she (hopefully) would have no trouble servicing the debt.
BTW, reread your post. When you say move-out notice, you mean from her? So, she's not interested in purchasing a home, herself? You'd consider yourself the primary owner of this home and she'd essentially be your tenant? Pass, pass, pass, IMHO.This message has been edited. Last edited by: BearCat49,
You can have your name on the deed without being on the loan...it is complicated and you will need a real estate attorney. There isn't anyway to absolutely insure a 4 month notice in the event this doesn't work out...there are too many variables-just ask any landlord.
"strandedpirate," I see that this was your first post and you haven't posted back since ~ maybe you didn't like the responses or, maybe we already lost you ~ but for you and for any others out there considering taking such an action?
Please don't try to play games with the banks or any other financial (lending) institutions - it can get you into a world of trouble far beyond where you are now. If putting your name on the application would cause disqualification, then address that issue and work your way out of it. Don't give that 30-50K of equity you still have left to someone and think you can play games and do an end-run around the rules and regulations. You can't and the end will be worse than whatever situation you are in today that has lead you to consider doing such a thing.
Stay put. Or sell and put any proceeds into the bank, rent for a year or more and spend the time repairing your credit. Why buy into future problems? Good luck ....
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