Clean Title as Collateral for Condo Loan

I have a clean title of my condo (paid off mortgage loan). Now I would like to take up a loan using my title to help my parents buy their own condo. What kind of loan can I get using my title as collateral? Thank you.

1 Answer

Assuming you qualify to carry the debt, you can obtain a "cash out" mortgage or line of credit against your condo in order to give or lend your parents the money to purchase their own. If you and your parents utilize the same bank, you may also be able to "pledge" your condo as part of the collateral for their new mortgage so that the one loan they obtain is tied to both properties. Speak to several lenders in your area to get a sense of your specific options. It is also important to consult both an estate planner and your tax professional if you plan to contribute a large sum to their purchase . . . there are several ways to deed the properties and to account for the gift or loan to the IRS, and all can have positive and negative financial implications with regard to your long term financial plans and goals.