Just approved on HELOC & my husband wont sign in Texas. Help

95 Replies

Ok, so I have a house I owned before we got married which was inherited from my grandparents, the house I grew up in. I still have my Homestead on it. We were married last year & he didn't want to stay there. I have finally gotten in a emotional state to rehab & rent. I am scheduled to close on HELOC Friday now he says he is not going to sign simply as a non borrowing spouse. I was also going to use the funds in the HELOC to purchase my next rental. Texas it is a community property state & the bank is requiring him to sign. I spoke to my real estate lawyer today. He suggested since I own a s-corp prior to us being married, deed it to the s-corp, but then I loose my Homestead & my HELOC loan & would have to resort to a hard money loan of 10% instead of 5%. What should I do & I no longer have the leverage of being able to buy my next property either because of closing cost.

can you cash out refi and hold on to the cash?

Originally posted by @Chandra Whittaker :
Ok, so I have a house I owned before we got married which was inherited from my grandparents, the house I grew up in. I still have my Homestead on it. We were married last year & he didn't want to stay there. I have finally gotten in a emotional state to rehab & rent. I am scheduled to close on HELOC Friday now he says he is not going to sign simply as a non borrowing spouse. I was also going to use the funds in the HELOC to purchase my next rental. Texas it is a community property state & the bank is requiring him to sign. I spoke to my real estate lawyer today. He suggested since I own a s-corp prior to us being married, deed it to the s-corp, but then I loose my Homestead & my HELOC loan & would have to resort to a hard money loan of 10% instead of 5%. What should I do & I no longer have the leverage of being able to buy my next property either because of closing cost.

 Unfortunately, there's nothing you can do but talk to your husband. California is also one of the 9 community property states, we see this here too from time to time, at which point "loan originator" blends into "marriage counselor"....

....yeah, about that. 

Originally posted by @Chris Mason :
Originally posted by @Chandra Whittaker:
Ok, so I have a house I owned before we got married which was inherited from my grandparents, the house I grew up in. I still have my Homestead on it. We were married last year & he didn't want to stay there. I have finally gotten in a emotional state to rehab & rent. I am scheduled to close on HELOC Friday now he says he is not going to sign simply as a non borrowing spouse. I was also going to use the funds in the HELOC to purchase my next rental. Texas it is a community property state & the bank is requiring him to sign. I spoke to my real estate lawyer today. He suggested since I own a s-corp prior to us being married, deed it to the s-corp, but then I loose my Homestead & my HELOC loan & would have to resort to a hard money loan of 10% instead of 5%. What should I do & I no longer have the leverage of being able to buy my next property either because of closing cost.

 Unfortunately, there's nothing you can do but talk to your husband. California is also one of the 9 community property states, we see this here too from time to time, at which point "loan originator" blends into "marriage counselor"....

....yeah, about that. 

Yeah, counselling is a big part of Real Estate, for sure, whether you're a Realtor, Lender, Buy and Hold Investor, Flipper, etc., it's always going to be a people and relationship business.

@Chandra Whittaker , have you spoken with him in-depth about it?  Without judgement, just to see where he's coming from and why he thinks that this is not a good idea?  Does he understand your plans fully?  Maybe try to have a discussion and see if you can come to an agreement and land on the same page -- at least make sure you're in the same book, and you have similar goals for the family.

Originally posted by @Chandra Whittaker :
@Dan Maciejewski Not yet, but I will try again this evening.

 Hope you're able to get him to see reason... this is only even marital property on a technicality. You brought it into the marriage. And even if you were to default, that would have zero impact on his credit.

Originally posted by @Chandra Whittaker :
Ok, so I have a house I owned before we got married which was inherited from my grandparents, the house I grew up in. I still have my Homestead on it. We were married last year & he didn't want to stay there. I have finally gotten in a emotional state to rehab & rent. I am scheduled to close on HELOC Friday now he says he is not going to sign simply as a non borrowing spouse. I was also going to use the funds in the HELOC to purchase my next rental. Texas it is a community property state & the bank is requiring him to sign. I spoke to my real estate lawyer today. He suggested since I own a s-corp prior to us being married, deed it to the s-corp, but then I loose my Homestead & my HELOC loan & would have to resort to a hard money loan of 10% instead of 5%. What should I do & I no longer have the leverage of being able to buy my next property either because of closing cost.

I thought you had to live in the property to claim it as your homestead?

May I ask you something?  Real estate is a very risky thing, and its pretty all consuming.  I cant imagine going it alone on a real estate investment/transaction unless my wife was all in and committed to the deal at hand.  If either of us said no, we wouldn't do a deal.

Do you think it might be a good thing to get your husband on board before going forward?  Just from a marital harmony issue?

I would love for my husband to be all the way in, however he is not and I totally agree with you, however, it's my dream not his and maybe after he sees me be successful he will want to join in, but I don't think he believes I am capable of of being successful in real estate. It will be a lonely journey, I hope and pray that God will bless us with the alignment that you and your wife have. I have done other business transactions without him and we have reaped the reward and benefits, this will the biggest thing I have ever had to do and of course the are a billion other factors. 

@Chandra Whittaker , my wife has not approved of a single house I have bought yet, except for 2 I sold shortly after acquisition for a hefty profit. I am over 30 doors now. In my case since I was pretty much the sole wage earner it was easier, but still it can be tough. there are several old threads about this topic you might search for. I finally had to point out that I had to work the overtime. If she wanted to go out and get a 6 figure job with benefits I would be glad to stay home and be supportive, but if it was my job to make the money I had to make the decisions, especially since she would not even read a single book on the subject. My wife is a great person but her folks drilled into her that no investment is proper except CDs backed by the FDIC. over the years she has mellowed a little, but either they love or believe in you enough to let you pursue your dream or must decide their fear of investing is more important to them than you are. Now I never said my way or the highway, but I made it clear that it was affecting our marriage. She loves music and I have never discouraged her in pursuing it despite it not paying much especially for the time she invests. We either love each other enough to tolerate differences or not.

@Jerry W. Thank u so much Jerry. I really needed to hear that!! Me being a woman, I really have no desire to do it alone, but he believes in the work harder not smarter philosophy. He told me to get another job & then he would sign. I already teach High School Architecture & have to small kids. So that is not happening because I am really trying to focus on this business. But thanks Jerry. I really appreciate your words of wisdom & I will look for those topics.
@Bart H. I would love for my husband to be all the way in, however he is not and I totally agree with you, however, it's my dream not his and maybe after he sees me be successful he will want to join in, but I don't think he believes I am capable of of being successful in real estate. It will be a lonely journey, I hope and pray that God will bless us with the alignment that you and your wife have. I have done other business transactions without him and we have reaped the reward and benefits, this will the biggest thing I have ever had to do and of course the are a billion other factors
Originally posted by @Jerry W. :

@Chandra Whittaker , my wife has not approved of a single house I have bought yet, except for 2 I sold shortly after acquisition for a hefty profit. I am over 30 doors now. In my case since I was pretty much the sole wage earner it was easier, but still it can be tough. there are several old threads about this topic you might search for. I finally had to point out that I had to work the overtime. If she wanted to go out and get a 6 figure job with benefits I would be glad to stay home and be supportive, but if it was my job to make the money I had to make the decisions, especially since she would not even read a single book on the subject. My wife is a great person but her folks drilled into her that no investment is proper except CDs backed by the FDIC. over the years she has mellowed a little, but either they love or believe in you enough to let you pursue your dream or must decide their fear of investing is more important to them than you are. Now I never said my way or the highway, but I made it clear that it was affecting our marriage. She loves music and I have never discouraged her in pursuing it despite it not paying much especially for the time she invests. We either love each other enough to tolerate differences or not.

 We can always count on Jerry for some great cowboy logic. :)

@Chandra Whittaker  i cant help with the partner issue, but i can help by saying that being a woman has zero to do with ability to be sucessful.  You will be as sucessful as you desire to be. Gender has nothing to do with it :) 

I will offer some caution tho- be careful with HELOCs. They can be called and rates can change.  I am never sure why they are seen as the be all and end all. To me they are too risky is the environment we are seeing now. You might see if you can do a cash out refi. Get a nice ammortization time frame and a set interest rate. 

Good luck! 

http://www.biggerpockets.com/forums/48/topics/1865...,

I am sorry I cannot find the other links.  I have dealt with this in some fashion for over 20 years.  Some folks say you cannot make it without the support of your spouse, I disagree.  It is hard, but not impossible.  For what it is worth I am technically becoming unemployed from a government job in January.  I worked there for 12 years.  Folks are asking me what I am going to do.  The fact is I don't have to worry about it.  I have made a little money over the years as an attorney, however my real estate net worth is 3 times what my assets are from working my regular job.  My wife said we need to ramp up our law practice and be going by January, I said lets take January off.  This is only possible because of real estate.  She said you know you I am glad you invested in real estate it really worked out. (I nearly fainted)  Of course I told her I had two houses I wanted to buy and she said we didn't need them and walked away.  The security from real estate is worth the risk.  I lost my job of 12 years and have absolutely no fear of the future thanks to real estate investing.

  It is hard to get your spouse to see your vision.  Be kind be honest, and ask them to be the same.  Will they fight you or block you from pursuing your dream?  Or will they believe in you and love you even if you don't do what they want you to do?  Hard questions, but they need answered.

Originally posted by @Jerry W. :

http://www.biggerpockets.com/forums/48/topics/1865...,

I am sorry I cannot find the other links.  I have dealt with this in some fashion for over 20 years.  Some folks say you cannot make it without the support of your spouse, I disagree.  It is hard, but not impossible.  For what it is worth I am technically becoming unemployed from a government job in January.  I worked there for 12 years.  Folks are asking me what I am going to do.  The fact is I don't have to worry about it.  I have made a little money over the years as an attorney, however my real estate net worth is 3 times what my assets are from working my regular job.  My wife said we need to ramp up our law practice and be going by January, I said lets take January off.  This is only possible because of real estate.  She said you know you I am glad you invested in real estate it really worked out. (I nearly fainted)  Of course I told her I had two houses I wanted to buy and she said we didn't need them and walked away.  The security from real estate is worth the risk.  I lost my job of 12 years and have absolutely no fear of the future thanks to real estate investing.

  It is hard to get your spouse to see your vision.  Be kind be honest, and ask them to be the same.  Will they fight you or block you from pursuing your dream?  Or will they believe in you and love you even if you don't do what they want you to do?  Hard questions, but they need answered.

 What kind of law do you practice? 

@Chandra Whittaker this is a very common thing in Texas. I firmly believe you should have been warned about this BEFORE your bank even took your application. It's not like this is the first HELOC the bank has ever written before. There are some very specific and hard rules for doing a "50(a)6" (a cash out loan) here in Texas. This is a common problem when people are "about to be divorced". Spouses have to sign here. If you are married and it's your homestead, it is state law that they must sign at closing. And you are correct, if you change this property to a non-homesteaded property then you won't get that HELOC. Which will load an ENTIRE other set of problems doing a cash out loan here in Texas. Lots to think about so I'll suggest another option:

You can change this to a non-homesteaded property. Then you can get a business Line of Credit on the property. The rate will be very different but you will be able to get that LOC up to about 75% of the value. Expect the rate to be in the 6's or so? So even though the rate won't be as good as your HELOC and you won't be able to get as much money out, it is still possible to do something here without spousal consent.

Unfortunately, that will be your only option here.  At least you have an option though.  I'm here in Texas and very familiar with this type of thing so feel free to tag me with any questions on it.  Good luck!

Originally posted by :

I will offer some caution tho- be careful with HELOCs. They can be called and rates can change.  I am never sure why they are seen as the be all and end all. To me they are too risky is the environment we are seeing now. You might see if you can do a cash out refi. Get a nice ammortization time frame and a set interest rate. 

Good luck! 

 Good caution, but if you're afraid of it being called, simply cash it out into your checking/savings first (if you're really set on using those funds, anyway).

@Andrew Postell Wow!!! Do you do these type of Loans Andrew. They really should have warned me before they pulled my credit & it has an emotional rollercoaster. I literally lost it last nite. Wish I had new.

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