Does a HELOC check everyone's credit on the title?

Question

If my uncle and I are both on the deed, and I'm wanting to get a HELOC, will it require his credit score to be decent? He has a bad score at around 540, but mine is around 750. Is there a way to get the HELOC without bringing in his bad credit? What if I wanted to do a cash-out refinance? Will that also depend on his credit since he is on the deed?

Jason Wray · Answer

Michael,

When you do a HELOC or a cash out refinance the bank/lender will only pull the borrowers credit and use only the income of the borrower on the application.  Names on title have nothing to do with the credit pull or approval of the loan.  The person on title will have to sign an affidavit allowing the use of the property.

Tomas Rodriguesz · Answer

As Jason said, and also if both are borrowers in the deed and you only want to be in the HELOC, keep in mind that your income has to be able to support it as well as your credit to be alone.

Tomas Rodriguesz · Answer

If I am understanding your question and have all the information-if you're applying as an individual and you're on “title” but not the “mortgage loan”, we would not be able to go forward with a Heloc.  An applicant must be on title as well as the loan.  This is due to the “Notice of Sale” document which must be recorded and each lender notified in case of any foreclosure proceedings.

Michael Cote · Answer

@Jason Wray @Tomas Rodriguesz okay so here's a more complex question: say you're on title for a $100,000 house, but not on the mortgage, and your other owner approves the heloc. How does the heloc lender determine how much the line of credit is for? On title you own 50% of the property, but you don't have anything to do with the mortgage or how far along it's paid off. So if the home is $100,000, and you own 50%, would they give you a heloc based on that 50% (50,000), or would they still somehow tie it to how far down the mortgage is paid off? I'm so confused.

Does a HELOC check everyone's credit on the title?

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