Unique House Hack Situation

[Kory Quitter]

I bought my first deal this past May, a 3 story 4bed/2bath Victorian home. It is livable (no renovations urgent before moving in) , but in need of updating.

Trying to get a mortgage as a 19 year old full time college student was essentially a hopeless venture, although I talked to a list of banks. Eventually my grandparents agreed to help me, and attempted to co-sign a mortgage. This was all good and well until the day before we were supposed to close the loan was rejected on the basis of me not having a high enough income. Luckily, my grandparents were in a position to be able to cover the loan in cash. The final purchase price (after negotiating $5k for roof repair and 1st year of homeowners insurance) was $88,500. I paid my grandparents a 20% down payment (which was supposed to go to the bank) and now pay them monthly what my mortgage would have been $450.

I have 3 roommates that pay $200 apiece that covers my loan payment ($450) and taxes and insurance (~$300). I pay nothing to live here, so I am able to save a large portion of my income.

Within the next year I will have a long enough work history to qualify for a loan. I would like to buy it fully from them as soon as possible.

My question is that all three of our names are on the title; myself, grandma, and grandpa. If at all possible, in about a year from now, I would like to use a home equity loan to essentially buy them out. This would allow me to conserve as much capital as possible for rehab and the next deal. I wasn’t sure how this would work considering all of our names are on the title.

The home equity loan seems like my best option, but if anyone else has any other ideas let me know!

Thanks for your help!

[Eric Veronica]

@Kory Quitter if you are planning to hold the property for the foreseeable future then you may want to consider a conventional, cash outt refinance instead of the heloc.  The conventional route will give you a low fixed rate locked for 30 years. HELOCs are usually floating rates that move with prime or some other index.