Rolleen asked:


My daughter and son-in-law and two small children moved to the US from Italy and have been living with my husband and me for the past 7 months. They want to buy a house, have $75,000 in cash to put down and I recently took out a second mortgage (fixed 15 year 6% home equity loan) for $160,000 to loan to them interest free so they can buy a house with cash for $235,000. But my husband and others are telling me it may get complicated with the IRS, etc.

We planned to have papers drawn up, like a promissory note, saying that they would make the monthly payments on the $160,000 loan that is under my name. And if they should die or move before the loan is paid off, the money from the sale of the house would go to pay off the $160,000 loan. Do I need to charge interest for them? They are actually going to be paying off the loan that is under my name and already has 6% interest being paid. Is the fact that it is over $100,000 going to be a problem with the IRS and interest-free loan’s to family? It’s not a gift because they are paying it off.

It’s all very confusing and I don’t want to get stuck with a big gift tax or imaginary interest tax or worse yet, get in trouble. Do I need a lawyer or can we just get a Quicken Lawyer software Promissory note and be okay? I trust my daughter and son-in-law to pay this loan that’s in my name. It’s just been hard for them to get a loan right now because of the requirements for 2 years residency, 2 years at one job and 2 years credit in US. Price of houses are down and I want them to be able to buy one now.

TYRONE

xredhat88 asked:


I want to buy an investment property I found for $50K. If I take out a home equity loan and use 100% of the money borrowed to buy an investment property can I list the interest I pay on a schedule E? If I take out a little bit extra to fix the investment property up can I still deduct the interest on schedule E?

I can get a better rate on a home equity loan and save $1500 in fees instead of getting a mortgage on the investment property. Also the home equity interest would be below my allowed minimum itemized deduction if I put it on my 1040 so it wouldn’t save me any money.

So is this allowed?

Thank you!
Yes this is a duplex that will be rented out. I will never live here.

ROMAN

Kennyb asked:


I have less than 15% equity in my home and need to consolidate some bills. My FICO is right at 530 and I have one late mortgage payment about 3 months ago. The amount I need is about 10% equity in my home, but can’t find a lender willing to let me have the money with such a low score. At this point in time, the interest rate is not as important as getting some things paid before they begin to affect my credit even more. Anyone know of any companies out there that will go with a 100% equity loan with my bad credit score?

HAROLD

Katja M asked:


My mother is running out of money (she is selling her house) and it is coming down to the only money she has is in the equity of her house (@$500,000). She currently has a mortgage at 7% for 50,600. She is considering a home equity loan or a home equity line of credit. I see home equity loans for about 7% and HE Line of Credits for 6.5% (quick searches that I’ve seen). Which is a better choice if she sells her house in the next 6months-1year and should she pay off her mortgage passed on these interest rates on the HEL and HELOC?
Any suggestions is greatly appreciated!
She is 69 years old…I shy away from a reverse mortgage due to the large fees that are involved in setting it up. The house is currently on sale.

ALEX

rubie00 asked:


When my house was worth something a few years ago I paid of an existing mortgage with a 30year fixed home equity loan. I also took out a small home equity loan for improvements. I had a ton of equity but now i don’t. House has been on market for 3 years since getting divorced and no offers. I have it priced well below what i owe but still cant lower it enough(don’t have enough money to pay the difference) My ex-husband lost his job so he’s unable to pay his portion on the vacant house. Can I do a deed in lieu of foreclosure on home equity loans? Is there a way to prevent oweing after foreclosure?
1) if it’s a first lien on the property by virtue of paying off the original mortgage, yes it can.
yes it is first lien

(2) Deed in lieu would be up to your lender; and you might still owe the difference between sale price and fees and what you owe.
which is why i’m giving my house back because i can’t come up with the difference of what i owe, what the house is worth and what i can sell it for. I owe 203k and its listed for 170k which after commission and fees i would need 40k to pay off loan. However, that would be that i actually got an offer. For the house to sale it needs to be listed around 159k

CLAIR

davemathews asked:


A Denver mortgage home equity loan is a loan calculated using the current value of your home less the value of the mortgage loan you obtained to finance it in the first place. Basically this means that you have access to the value of your home, which will have appreciated since you first obtained your mortgage and your home. While this may be an easy way to get your hands on some spare cash, you should really have a good reason taking out such a loan and you should only use the money for matters that are extremely urgent.

 With a Denver mortgage home equity loan, you can take out a loan consisting of a lump sum available to you at a fixed interest rate. Just like a regular mortgage loan, you will have to pay monthly interest payments, but it is likely that the interest rate for your Denver, Colorado mortgage home equity loan will be much higher than the interest rate of your original mortgage. This is because a Colorado mortgage home equity is considered to be much riskier than a regular mortgage, since you already have another loan that you are still in the process of servicing. You will most probably already have to pay certain fees in order to obtain this loan.

 In order to justify taking out a new mortgage home equity loan, you will need some very convincing reasons for it. Being in debt is never a good thing, and if you already have one mortgage, you should only take out another if you really have urgent need of the money. One good reason that you might need to take out a Denver mortgage home equity loan is if you have a large credit card bill that is about to rollover. Or perhaps your child is about to start attending college and you do not have the necessary funds to send him or her to college.

 If you take out a Colorado mortgage home equity loan, you may be able to solve your current financial problems, but you will need to work hard in order to make it a lasting solution. If you were unable to afford to pay your bills or send your kid to college in the first place, then this probably means that your previous lifestyle was not sustainable. You must be prepared to make changes to your lifestyle in order to afford the payments on your mortgages. If not, you will find yourself in an even worse position than you were before.

 Of course, before you even think about heading down to the bank to take out your new mortgage, you need to do your homework first. There are several things you need to pay attention to. Of course, you first need to find out exactly how much money you need to solve your financial troubles. Then, you need to do the necessary calculations to determine if your home equity is enough to cover a loan for the amount that you require, and if you will be able to service the mortgage after you take it.

 If, after you have done all the necessary calculations, you determine that you can service the mortgage if you take it, you can take a trip down to your local bank and obtain your mortgage home equity loan and solve your financial troubles.



MARCEL

concerned asked:


my fiance has her own house titled in her own name with a 200k mortgage loan owned by the government and a home equity line of credit of 25k totaling 225k debt…The house value in today’s market is probably 140-180K maybe. The mortgage is too high to just keep the house for rent because she’ll probably end up paying for part of the mortgage and taxes paying @ least 5k a year for both. I don’t think its worth the time and effort try and keep tenants in the house and to pay money up front to just get the money back @ tax season.
Selling the house is going to take years unless the bank agrees on a short sale and the bank agrees to take a loss on the mortgage, even so, you’ll be paying a years worth of mortgage payments just to try to sell the house to save your credit before it goes into foreclosure anyways right? why lose 20k in money if the house goes into forclosure anyways???
I say…tell the bank your hardship, make no payments for 12 months and let it go into foreclosure, since were moving to a new house and the bank could possibly give you a few thousand dollars for keeping the house in good condition when you leave it. Your credit will go sour for a few years but why keep paying on something you never wanted in the first place?
I don’t believe the bank will garnish her wages for the mortgage loan or the equity line of credit, they take back there asset, which is the home… what should we do?

CLAY

Michael K asked:


Last year, I was compelled to agree to an interest only equity home loan. I paid cash for my home 2 years prior, and owned the home without mortgage of any type. Now, I am paying off an “interest only” loan payment for 30 or more years, with out even touching any of the principle.
I have been getting dozens of calls from “RE-FI” who are dying to jump on board, but for the life of me, can’t see where they make the money on such a poor loan structure.
I have no income but a small investment dividend, coming to an end and lots of equity in property, both personal and real.
ReFi companies offer me lower monthly payments and other services to get me on board. Are they just happy to take on the interest only account? Or, is there something else I don’t know about.

DAMIEN

dumbmistake asked:


I cosigned on a mortgage AND home equity loan over 5 years ago for my sister (and her husband) under the verbal agreement that they would get their act in order and refinance to get my name off the mortgage and loan within a year or two. Well it’s been over 5 years and not only are they doing nothing to get my name off their debt, but they have completely ruined their credit as well as mine. I am on the deed but with only 1% interest. I have been asking her for the past 2 years to hold up her end of the agreement to no avail. I recently got married and purchased a home of my own - but could not put my name on our house because I am carrying this other debt. My husband is carrying all of our debt under his name, while I am carrying my sister’s. I’m pretty much screwed unless this gets taken care of. I am currently seeking legal advice, and quite possibly will take her to court, but that will cost me a lot of money. Does anyone have any insight on how to handle this situation?
I am thinking there must be a way to force her to sell the house to repay the mortgage and the home equity loan - and thereby satisfying the loan that’s under my name?

ALLEN

jeff asked:


I am currently in a bad financial situation. I have terrible credit and can’t even get approved for a new credit card. My monthly payments on my car and credit cards are too much for me to handle. Recently, I have even been having trouble making my mortgage payment. The sad thing is that my mortgage payment is currently only $900. I currently owe $12,000 on my mortgage and my house is worth anywhere between $600,000 and $800,000.
I want an equity loan of $100,000. I will use this money to pay off all other debt and help fund my son’s college education. I do have steady income and will have no problem making the payment on this loan.
Are there any good company’s that will finance my loan? I am afraid that if I apply to too many places I will ruin my chances of getting the loan because I know that each failed application has a adverse affect on my credit score. Any help is appreciated.

HECTOR