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home equity loans and life estate

Posted on: 11th Apr, 2012 07:09 pm
can i as the remainderman of my step father's life estate take out a home equity loan?
I need to preface my response with a disclaimer: I am NOT a lawyer, and my advice to you is to seek an attorney regarding your specific situation. My response is as a layman with a passing familiarity to this particular subject.

Life Estate is interesting. Your step father can do anything he wants to with the property without your consent, BUT when he dies, the property transfers to your name. He can sell his interest in the property, and a new family can move in. At his death, it will be your property, not the new family's.

As far as the appraisal: The buyer can technically order the appraisal with only your step father's consent, but he has no incentive to do so: Without your signature, your stepfather cannot sell the property free and clear, and without that ability, the property is generally unmarketable. The buyer would be paying for an appraisal and have no guarantee that he could purchase the property.
Posted on: 12th Apr, 2012 12:01 am
Hi teri,

Unless the property is transferred in your name, you won't be able to take out a home equity loan on that property. In order to take out any kind of loan, the collateral should be in your name.

Thanks
Posted on: 12th Apr, 2012 07:51 pm
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