The bank won't give me a loan to buy out my sisters half of the house should I just pay cash?

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babymaradona1_IHB

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I tried to get a loan at the bank to buy out my sisters half of the house but they said that the house title has to be in both our names for at least six months for some reason. So I was wondering if I should just pay cash or should I try to get an FHA loan or something? In some ways I was kind of interested in keeping some more savings for the next few years to see what happens. If I pay cash it will take up most of my savings.

Thank you for your insights.
 
[quote author="babymaradona1" date=1247742375]I tried to get a loan at the bank to buy out my sisters half of the house but they said that the house title has to be in both our names for at least six months for some reason. So I was wondering if I should just pay cash or should I try to get an FHA loan or something? In some ways I was kind of interested in keeping some more savings for the next few years to see what happens.</blockquote>


this really depends on YOUR needs. You said you are 60 years old. What are your plans? What do YOU want to do? You said you have enough money to buy out your sisters half and enough left over for another house. Do you eventually want to live in an assisted living type place or do you LIKE the house in Tustin? If you want to live in the house in Tustin, then $200k sounds great, esp considering the bad market now and the consequences of selling.



The bank won't give you a loan even though you have significant liquid assets (cash)? Is the probate thing happening?



So many more questions, like do you have kids or other dependents, etc etc.



I am going to be completely honest with you. A house is always going to be there, even if it is worth 50% less than what you paid. (unless there is some earthquake or something but thats different). My point is, don't go out and trust anyone with your hard earned money. This is your life savings and the bankers have proven they know tuttili tute about money. Just follow the old rule: diversify. Do go out and buy one stock one with all your money, or one house. Buy the house, keep some cash, gold, platinum, palladium, get some bonds, apple stock, and in fact, if you have the money, buy a classic car and keep it in the garage. Some kinds of art, and other collectables like cars, can significantly increase in value, and are currently taking a hit just like housing. Do not trust any one person or entity. Split it up. Different assets in different places. Ex. keep some gold at safe at home and some at the bank, etc. This way, if you go bust on one asset, it takes several more busts for you to go belly up.



And i seriously hope that all that cash is not sitting in one account. Indymac customers are still fighting for their money. Trust high interest rates like you trust Chryslers Lifetime warranty.
 
[quote author="babymaradona1" date=1247749568]Thank you for your reply. Do you guys think I should try to get a regular bank loan or an FHA loan?</blockquote>


An FHA loan will give you the ability to put just 3.5% down, but will cost more in fees to start up, will have a higher rate than a conforming loan, and will require PMI.



A conventional loan will likely require 15-25% down, depending on your specifics, and the lender's requirements. It will take more of your liquidity, but may cost you less for the reasons above.



Which option is more appealing to you?

-IR2
 
[quote author="babymaradona1" date=1247749568]Thank you for your reply. Do you guys think I should try to get a regular bank loan or an FHA loan?</blockquote>
Call around to various banks and credit unions (they are great) and ask about their "title seasoning" requirements. Big banks can be a pain in the ass to deal with so maybe your best bet is to talk to community banks and local credit unions.
 
I was thinking of trying to get more of a conventional loan with the lowest interest rate possible. I was also considering getting a 15 year loan because it has a slightly lower interest rate and I don't want to drag my payments out for so long. What do you guys think? I was surprised that the bank would not give me a loan considering I already own half the house, they said the title has to be in our names for six months first. The property did not go into probate my parents set up a living trust for us.
 
I would go with USC and IR2's advice (without really knowing your details)



Go to a credit union or local bank, explain the situation, get a 15 year fixed with 20% down. diversify with the rest of your cash into safe investments, like CDs or bonds, or even savings accounts.



Then get on with your life and enjoy it!
 
There's something wrong if you're 60 and want a 15 year loan. Even more if you plan on buying another home...I really don't get it. Aren't you supposed to start thinking of downsizing to a smaller place with a single floor. I know you're not 80 yet, but how many more times do you want to move? Not sure how much longer you plan on working either. The only reason it makes sense to take a loan is if you think you will make more money in investments than what you will pay the bank. Considering, you should be invested at least 50% in bonds, I don't see how that's realistically possible...considering risk it seems like a really bad bet. IMO, either you have enough money and pay your sister or take half and buy something that will fit you until you get older.



Good luck!
 
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