What to do if I own a house outright with my father and now he wants to take a $50,000 loan out on the property?
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What to do if I own a house outright with my father and now he wants to take a $50,000 loan out on the property?
He needs me to sign a document allowing him to get the loan. What are my risks? If he and his wife default what happens to our house?
Asked on October 2, 2011 under Real Estate Law, California
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Please, please, please do not sign anything unless and until an attorney can review the document for you and tell you exactly what you are agreeing to. Are you actually co-signing the loan as a mortgage? Or are you consenting to the house being used as collateral for a personal loan (secured loan)? What can happen is that they can call in the loan if he defaults and either enter a judgement or try and foreclose the property. I would seriously consider sitting down with your Father and an attorney to discuss the documents in detail and to see if there is another avenue to help you both. Good luck.
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