All Forum Posts by: Jake L.

My brother has bad credit and currently has a mortgage with an interest only variable loan on his primary residence. He asked if I could add my name to refinance the property to get a better rate (30 year fixed). Luckily, the property has increased twice in value. In exchange, he is willing to give me 200K in equity and promises to continue to pay PITI. All of this would be in writing of course.

1) Would you agree to this?

2) By adding my name to title and refinancing, would this trigger any tax implications? Increase in Property taxes? (property is in CA)

3) Is there anything else you would be concerned about by doing this? 

4) If I were to seek professional advice, would it be better to go to a RE attorney or CPA?

Thank you both for your responses! 

Sorry for the newbie question but I wanted to confirm with BP that it makes more sense for me to cash out refinance vs. getting a HELOC.

Current situation:

$190K balance on primary residence (Property A)

Fair market value = $400K

3.875% fixed 30 year loan (Year 4)

Goal:

1) Buy another property for primary residence in the next year

2) Convert current Property A into a rental property

3) Would use cash out refi or HELOC (~$80K) to buy 2-3 more buy and hold OOS properties in the next 6-12 months

My rationale for using cash out refinance instead of HELOC

1) Current refi mortgage rate on Property A would be similar to current rate of 3.875%

2) The down payments toward the 2-3 OOS properties will be locked up for at least 5-10 years which makes it harder getting the cash to pay the HELOC down

3) Refinance rates would be fixed whereas HELOC rates are variable and may likely rise in the next 5-10 years(?)

4) The HELOC is for OO properties. Once I make Property A into a rental property, I would risk having the lender potentially cutting off my HELOC, right?

Is my assessment correct or am I missing something? Is there a scenario where HELOC makes more sense for a buy and hold / long term investor?