by Mr. T in DC
Question by Mr Yankee: I own a house with my brother, I would like to buy him out and cash in the equity. How can this done?
Do I refinance? A new mortgage? How do we determine buy out price?
Answer by Alex H
Get a realitor to assess market price, then pay him half. Either in cash, or get a mortgage in your own name for the full value.
But you can’t cut him out without his consent — if that’s what you’re hoping for.
What do you think? Answer below!
The straightforward way is to sell the house and split the proceeds, after expenses and taxes, in accordance with your shares of ownership. If you want to keep the property, you will need to get it appraised, buy out you brother’s share, and then raise a mortgage on it. If you want to keep the property and will need to borrow money against the property to do so, consult a bank as you will need bridging finance as well as a mortgage.
You should first buy him out and secure title in your own name. Then you can pursue a mortgage.
Assuming you are keeping the property and both currently on title, he will sign a Quit Claim to you (held by closing agent until closing) and you will do a cash out refinance.
A good loan officer can handle all of this for you and make it happen. I suggest Hometown Banc Corp. My mom used them. They may be your best opportunity for someone to say yes. If your credit does not measure up, they don’t simply “forget to call you back.” They help you get into a credit repair program you can afford regardless of income. Check out the free evaluation form at http://www.totaldebtsolutionsllc.com and a Hometown loan officer will contact you .
If you plan on keeping the home, the best way to do it would probably be to do a refinance in your name only, give your brother his 50% (est. determined by real estate professional), and make the loan amount large enough to give you the cash you want. You should be able to deduct a portion of the closing costs from the 50% you are giving to your brother, since he is responsible for that also.