FL Cash Out Refi - foreign loan or conventional?

[Neil Da Silva]

Hey BP! My family owns a property in Florida that we want to cash out refi. We have 100% equity, no encumbrances. The property is in my Mother's name. We are Permanent Residences of USA, primarily reside in Toronto, Canada. My mortgage broker is saying that we can only get this done with a foreign buyers loan because my mother has no credit in the US as she lives primarily in Canada. He said the rate will be 8-8.5%. I don't want to refinance at such a high rate amortized for 30 years. I am an active investor in Florida with great credit however I wanted to stay out of this so that I do not effect my debt service and my ability to continue investing. Do you guys think I should co-sign on the refi for a better rate? or Use the high interest foreign buyers loan? With respect to the property, current rent is 1350 and the foreign buyers loan payment would be 700-800. We are going to reinvest the money pulled out minus paying some small expensives. thanks!

[Stephanie P.]

@Neil Da Silva

There are two pieces to the puzzle (not to mention income).

1.  If your Mom is a permanent resident, the loan should be treated the same as a US Citizen.  If she's a foreign national and not a permanent resident, then the rules are vastly different.  

2.  If you co-sign, the rate won't be any better because your situation, as you've described it, is the same as Mom's (permanent resident vs foreign national).  Co-signing only affects the trade lines, but in the conventional world you're trying to borrow in, you're not on title, so you trade lines won't necessarily help your Mom.

Stephanie