Legal Question in Real Estate Law in New Jersey
Home Equity
My house was recently paid off. The house is jointly owned by me and my wife. I woul like to get a HELOC on my house. My wife would not sign any loan documents including a grantor form even if I want to get the loan under my name. I contacted a couple of lenders who said that they cannot process the loan without her signing the necessary forms since is the co-owner on the property. I am an MD who makes the bulk of the household income. Is there any other way I can get the loan without her signature on any forms?
2 Answers from Attorneys
Re: Home Equity
Your problem is that the lenders won't make the loan not that they can't. In theory, you could mortgage your half of the property as security for the HELOC. However, if you bought the house as husband and wife, the lenders actually have a good point. The survivorship interest of a tenant by the entirety cannot be defeated by a deceased spouses creditors. Therefore without your wife's agreement, if you should die the loan becomes an unsecured debt of your estate and the mortgage would be extinguished. So, the lenders have made the right decision for them.
You cannot force your wife to sell her undivided half interest in the property. In theory again, you could buy it. That is probably not a good financial move for her regardless of what kind of terms you are on otherwise. It might also not be a good deal for you depending on your other financial circumstances.
If your wife doesn't change her mind, I suggest that you look for some creative financing that does not involve a mortgage on the marital home.
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