Equity

[Aaron Moore]

My grandfather owns his house free and clear. I've run the idea by him about taking out a HELOC to help me purchase a property and he seems inclined to do it. My question is does the property have to be in my name to use the funds or is he able to simply lend it to me?

[Bill S.]

@Aaron Moore so your grandfather can take out the HELOC, draw the funds and lend them to you. I would advise against this. What if you make a bad deal and lose the money? What will Christmas dinner be like?

If you insist on borrowing from your family, get everything in writing. Get formal loan documents for you to sign. Spell out all the details of the loan, repayment plan with dates, rates and amounts and any other details need for a loan. Do it like you were getting a loan from a bank.

The best approach would be to have the loan secured by the property you are purchasing. 

My question is why do you need your grandfather to loan you the money and why not just get a loan from a bank?