How can I help my mother keep the house ?
This is a very sweet gesture, but we will need much, much more information to give an accurate recommendation. Why is she losing the house, because she can’t afford to buy it herself? Why does she not qualify for a loan? How much is the current mortgage and how much equity does she have in the house? What are your long term intentions by helping her (do you want to move in yourself later on)? Are you a current homeowner yourself, would you qualify for a mortgage with her?
Good morning, thank you for replying. She is not losing the house, my father is trying to force her to sell it in their divorce. She does not qualify for a loan on her own due to her credit. The current balance owed on the house is $94,000. House value is 400,000. Im unsure of the equity on the house right now. My intentions are to help her keep the house, i know in the long run she is okay. She lives in New York and is able to rent out most of the house to tenants. I currently own my house and do not have any loans aside from a student loan. I would not move in later, i would keep it to rent out for passive income. I’m not quite sure if i would qualify for a loan with her, i don’t know what all that would require from my part.
First, with those questions I would highly recommend she get in touch with a divorce lawyer and a loan officer if you have not already. They are familiar with these kinds of situations and can give you real data vs. making decisions off assumptions.
First recommendation, you need to analyze whether you are even allowed to rent out the house to multiple tenants. Many single family homes cannot be rented out by the room due to zoning restriction. Look on the forums here on Bigger Pockets, and start to educate yourself on what it would be like to be a landlord before you intentionally step into that position. If your mom is planning on renting a room out to help pay for her loan, you'll need this information too.
Assuming that this is a 50/50 split of assets, then your dad has a claim to 50% of the equity in the property. He could get his money by having your mom refinance the house at $247k (equity split + remainder owed on the property), but she would need to be able to qualify for that loan. Don't move forward on the assumption that she can't qualify, she (and you) need to talk with a loan officer who can give you real data on which you can base your decisions. If she can't qualify for the loan by herself, then you could be on the loan with her and see if both of you together would qualify. Keep in mind, this now means you are also liable for the payments. So if she stops paying, and you can't afford the extra payments yourself, your credit score will tank and you'll have a foreclosure on your record.
Best of luck to you and her on this journey :)