I currently owe 167K, and the house was appraised for 210K in july. My friend is willing to lend me 15K, can I use my house as collateral? or put a lien on it for that amount to ensure him the money incase of anything? If so... how would i go about doing it?
2007-01-06 10:15:38 · 4 answers · asked by Stephenie 1 in Business & Finance ➔ Personal Finance
Your friend is the one who should record a "promise note" in the county recorder's office as a lien holder. Once it is recorded you cannot sell the house (Title to your house cannot transfer) without a "release" from him saying that he has been paid in full. Or you can instruct the escrow company to withold sufficient fund to pay him at the close of escrow. BTW, in case you fail to fulfill your obligation to pay him as stated in the promise note, he can foreclose on the property. Check online or go to the stationery store for preprinted standard forms. Good luck.
2007-01-06 14:14:36 · answer #1 · answered by T T 1 · 0⤊ 0⤋
The only way you can use your property that way is by getting an equity loan. The first mortgage is subject to being sold to other Mortgage Companies and often is. Equity loans cannot be sold. With an equity loan you can get the $15K and deal only with the mortgage company. No need to borrow from a "friend". Now your credit doesn't have to be perfect. In fact, the company can afford to take more risk with you because the equity loan cannot be sold. Contact your mortgage company and find out how to go about getting an equity loan. I caution you not to accept a loan from a "friend" just because the need seems so dire. You need protection. Contact your mortgage company and set up that equity loan. Good luck. While I am thinking about it, if this is a company you are dealing with and they are doing service on your home, then if you default on your payments, they do have a lien on your home for the amount due them. An older woman had a fence put in around her house she had owned for over thirty years. She defaulted on the loan and all of a sudden her house was being repossessed. I jumped in an advised her to go to the credit union for the loan. She did and saved her house. You also might try a credit union. You want the lowest rate. Compare.
2007-01-06 18:37:07 · answer #2 · answered by pshdsa 5 · 0⤊ 0⤋
That would be making you an equity loan or 2nd, and all the paperwork would have to comply with the primary mortgage holders requirements , since they actually own the house , not you .
But perhaps I err, call them & ask.
2007-01-06 18:21:16 · answer #3 · answered by kate 7 · 0⤊ 0⤋
If your credit score is in line, you can easily refinance and pull out the money you need. Check out the free situation evaluation form at
www.totaldebtsolutionsllc.com
2007-01-06 21:21:20 · answer #4 · answered by Anonymous · 0⤊ 0⤋