Housing Refinancing 101- Options in NYC or NJ for a NYC home?
March 24, 2016 12:28 PM   Subscribe

Am looking for loan to refinance a paid off, income generating house I have inherited with two brothers. The aim is to get 1/3 of the value to buy out brother M, so it will become co-owned with my other sibling. More inside!

I am a renter for life, and live in NJ. The house is in the Bronx. I would prefer to find an appraiser the loan-giver will also use, to avoid paying for two appraisers.
However, I am a newbie at the re-fi and mortgage business, and do not know if and what better options there would be than using my own bank- Chase Manhattan. Not sure how rates compare or upside of banks vs brokers.

The house will be valued at appx 300K, but because of expenses I paid in maintaining settling the estate the loan would probably be for about 85-90 K. My other brother and I do to plan to sell for 6-10 years. I currently have rent coming in at 2,300 month, and more than half of that should end up as profit of which I'd be okay using up to 1K a month paying the loan. (My brother that wants to keep the house, also wants me to commit to paying loan and expenses out of this- he cannot commit to any financial contribution, so it will be on me.)
I am not sure if there are better options than Chase bank? Brokers? Or if it makes a difference if I do this in NY or NJ (where I reside).

Also not sure if legally I can do the refi on my own if my brother will be owning half? Will I need him to sign on too? Some say I should incorporate with my brother to reduce liability? Pros and cons on that?
Also wondering if it is possible to get the refi people to suggest the appraiser earlier on in the process, as we'd nee the appraisal early to settle the estate.

Anything else I am missing? Absolute newbie at this and any and all words of wisdom or referrals would be appreciated. TIA
posted by TenaciousB to Work & Money (4 answers total)
 
You really need to consult a lawyer to deal with the complications of having the property shared between the three of you. There are different kinds of ownership interests you may have, for instance, which affect how you have to deal with your brothers.
posted by praemunire at 1:49 PM on March 24, 2016


I am working with a lawyer as well as an accountant, so (as complicated as it is) I do have that part covered.
However neither really wants to recommend a lender, and I figured that part of it I should crowd source for advice here. I find the whole fees and interest thing pretty intimidating. Thanks!
posted by TenaciousB at 1:56 PM on March 24, 2016


It gets tricky because it's a rental property not owner occupied. Go to a few banks, price it, see where it gets you.

I've used brokers and that was good too. If sharing the cost of the appraisal with your brother gives you pause, you probably shouldn't be a rental property owner. You're one bad tenant, roof replacement or furnace away from disaster.
posted by Ruthless Bunny at 5:27 PM on March 24, 2016 [1 favorite]


I'm confused about both of you wanting to pay out to the third brother - but apparently you are the sole source of money (through a loan soley in your name and soley paid by you)? I don't understand why your brother thinks he should be part owner of a house he will not be paying for. If there is a major repair thatonly you pay for, how do you recover those costs - at the time of selling or years later? Do you just get the dollar amount of the repair or does it entitle you to larger size of equity? As you mentioned liability, the house would then be an assesst that could have a judgement issued against it (for unpaid medical bills, for example), which could wipe out not just your equity but also the loan amount as well. Unless there is something bizarre about appraisal costs in the Bronx, they are usually very cheap (like a couple of hundred) so even paying for two appraisals shouldn't be onerous split two or three ways.
posted by saucysault at 9:47 PM on March 24, 2016 [2 favorites]


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