Question About My Personal Home Vs My Rental Homes
Just a quick question. In a hypothetical situation, lets say something goes horribly wrong with my rentals and they got forclosed on. They are all in my name not my wifes name and I got them before we were married. How would those properties affect my personal home assuming I made payments ok on that mortgage and wasn't behind on payments?
If your rental house gets foreclosed on, the bank gets the rental house, and your credit gets trashed. But they can't touch your private house. Foreclosure is not a lawsuit, it is the bank taking the collateral back for the defaulted loan.
But, you need to think about protecting yourself from lawsuits. If one of your renters or his friends fall off the deck at your rental, they could sue you and go after everything in your name. That means your home, your other rentals, etc. Look at putting the rentals in separate entities (LLC or Corp). You may also want to put your home into your wife's name so it can't be touched if you get sued. Of course, with 50% of marriages not making it, you may not want to. Talk to an RE attorney and your accountant to see what is the best way for your situation.
Peter
How can I put it in her name if we both need to qualify on the loan. Would I just quitclaim deed it to her then?
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If you and your wife's income is needed to qualify for a loan, the bank would require her to sign a deed at closing. Not before.
Lori
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Couldn't I quitclaim deed it back to just her after we close? That way the house isn't in my name even though I am still on the financing, and the homeowners ins will be in her name anyhow so I would think that wouldn't trigger the DOS?
[addsig]
The property is quit claimed to her or any one else (give it to me!?!?!), but the loan is still in both your names.
I have seen many forcloseures where the owner of record is chet, but the trustor is Fido.
Find out what the forclosure law are in your state, some are judicial where it is a law suit. Others where although it's not judicial, the bank can recover assets other than the collteral on the loan.
An entity of some should for financial and liability reasons is the way to go IMHO.
Well worth the ~2K I paid to set mine up.
Post back and let us know wht you did what you end up doing.
I will post back and let you know, you proably won't hear though until October, thats when our house will be done being built!
Thanks
Joe
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