I'm a 31 y/o recently divorced single, self employed horse barn owner and riding instructor. I made the mistake of trusting a "highly recommended" mortgage broker and got myself in a bit of a pickle and I need guidance!
- Ex husband and I bought my 10 acre property from my parents Sept 2013. My parents had owned it 17 years prior.
- My amazing parents traded houses with him and moved in with me so I could keep the family farm and my business. (Jan 2016) Divorce was finalized Feb 2017 and I was awarded the house in the decree.
- My realtor and fellow horsewomen recommended a mortgage broker so that we could get the mortgage moved into my parent's name. It's currently in my ex husbands name only. I spoke with her and emailed her the details and what our goals were for this transaction which were:
*Ag exempt property valued at (per county tax assessor) $544k. Current loan balance is $251k.
- Get the mortgage is my parents name (and mine too if possible, if not that's ok.)
- As little money out of pocket as possible (aside from paying for appraisal)
- Eliminate PMI
- Cash out $30-50k (to pay off all my debt).
- Broker says "No Problem! Lets remove your Ex from the deed, and add your parents. After a 6 month 'vesting' period, they can do a cash out refinance." So I'm retarded, and do what she tells me to do.
- I had some costly farm repairs come up, and I start looking around for ways to speed the process up. That's when I discover...You can not do a cash out refi or home equity loan in the state of Texas on ag exempt property. How in the world did she not know this?!?!
I also spoke with a few other brokers/lenders. They suggest removing ag exemption till closing and then re-applying. This would cost me a years worth of roll back property taxes which would be about $5,000, a huge headache and very risky that I may not get it back. They also suggest a regular refi with no cash out. This means not affording health insurance and another 3 years of stress until my equipment is paid off. Getting the equity loan would free up $2000 a month for me! I start asking about various options that are going through my head...
Option 1: Why can't I just sell my parent's the property for $300k with $10k in concessions to cover the closing costs and gift them the equity? (Should've done in the first place). I'm told "but since they are on the deed, I can't sell them their own house." (cursing that darn broker)
Option 2: Since all three of us are on the title, why can't they just buy me out? I'm told "The title company won't insure it since we all still live here." Can you guys shed some light on this for me? How are they going to know I still live here or not? What if I want to get my own place a mile away? What if I want to move in with my boyfriend? Yes, my business will stay. Yes, I pay my parents rent. Surely, there has been a family of siblings that inherited some ag exempt property that one sibling wants to keep but has to buy the other one out!
Any other options or tips to get this done besides removing my ag?