Is my home considered free and clear?
by Mortgage Rates on Thursday, October 14th, 2010 | 3 Comments
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HELOC are variable rate.
Your home is not “free and clear” because you owe money on it (to your mother). You mother is the “bank” and loaned you the money for all practical purposes. The fact that no loan was recorded doesn’t mean that no loan exists and that loan will be a prior claim.
If you apply for a loan without listing the debt to your mother, it is credit fraud. The HELOC lender might let it go through but they might want an explanation of where the cash came from to buy the house since no loan is recorded.
1.) Do you own the home free and clear? No. You have a private loan on it through your Mom, right? Then you don’t own it free and clear. If you apply for a HELOC part of the ap is to disclose all debts. If you don’t disclose this it will be fraud.
2.) Max combined loan-to-value on most HELOC’s is around 80%-85%. Take the estimated value, times it by .80 and subtract the amount owed to your Mom.
3.) HELOC’s have variable rates that can adjust monthly. Many offer a one-time lock provision but this will depend on the lender.
4.) Can’t provide an answer r/e the warranties…contact the dealer directly for this.
Hello Kyle,
You may or may not know this, but your mother did a blessing on you offering you a private loan. Now your your first question is quite clear. The home is in your name, but you owe your mother, so that is still considered a debt or liability. Moreover, you should thank her for saving you 1000′s of dollars in interest that you would owe to the bank. As far as the HELOC goes, you can count this as a private loan and say it has 0% interest. Stating this might make your situation become beneficial in obtaining the HELOC.
The most important question to ask yourself is why your obtaining the HELOC. If your creating equity into your home, banks and/or credit unions are satisfied that the home is offered as collateral. Do not get fooled into tricks to make you pay a higher interest because the lender might take your home if payments are not made, so you are also aiming to have job security.
What I suggest you do for the car is sell the 17 grand car and buy the 5.5k car, so you are easily able to pay 11500 towards what you pay in the 20500. This way you will save quite a bit on interest towards your car payment. Not going by what I read, (but don’t take my word for it) I believe you will easily get the $10,000 you want in HELOC if you present a reasonable argument. Going to the warranties for your car, my simple question would be to ask you why you want to cancel them. These will increase a buyer’s interest, and if anything you can tell them about the refund back, so you both benefit, if the distribution is fair.
If your still reading, I have a system that you might be interested to see. My dad qualified for it and it will have him paying his mortgage in half the time. If you can imagine how excited I am for him in the amount that he will be saving. It is important for you to see if you qualify in this system saving you money and even growing your income after you are debt free. This is with little to no change in your current lifestyle; in fact, you may even put your money in better places once you have no debt. If you have even the slight interest, please contact me on my Yahoo for more information and to see if you qualify.
- If you had the opportunity to stop a recurring bill of 300 dollars a month, how long would you take?