I thought today we’d lighten things up with a question from someone out there in the YouTube verse. This is a real question from a real person, with a real answer.

Enjoy!

I inherited a house with a mortgage. How do I get my name put on the mortgage so I can tap into the equity to repair the home?

Great question. It’s easier than you think, though it doesn’t happen exactly the way you think.

The first thing I would try is not to get your name on the current mortgage, as there’s no “equity” to tap there, you are just adding your name to the list of people the bank can come after if the mortgage is late, but to get a line of credit that is second in line to the current mortgage.

Said another way, I’d just try to get a home equity line of credit (HELOC) that runs parallel to the current mortgage.

This is often possible because the current mortgage is significantly less than the full value of the home.

If you ask and they say no, the next thing to do is refinance the home in your name.

You essentially replace the old loan with a new loan (including any equity you’d like to tap into) and take over from there.

The downside to the second option is you’ll likely lock in a much higher interest rate than the decedent had (hopefully they refinanced when rates were in the 3% range).

Those are the two options I’d pursue.

Oh, and one last tip. Just because your bank says no to option 1 doesn’t mean a different bank will. Shop around before you go to option 2. You might be surprised with what you can find.

Have a great week!

Sincerely,

Christopher Small
Owner
CMS Law Firm LLC

PS – we love referrals. If you know someone that could use our help, let them know about us!