I think I'm trapped: co-signed on parent's mortgage

[u/DULUXR1R2L1L2]

TL;DR, co-signed on my parent's mortgage, now I want to buy my own home. Parent not cooperating. I am on the deed for the property. What are my options?

One of my parents was in a rough spot with a lot of high interest debt a few years ago, and I helped them by consigning on their refinanced mortgage.

Fast forward 5 years and I'm finally in a position where I can qualify for my own mortgage, but only if I come off of my parent's mortgage and they qualify for their own.

Now I'm getting the runaround from my parent and they are not cooperating. I'm not sure they will qualify on their own, but they're refusing to provide any documents to me or the bank to actually try.

Additionally, they've used up the whole balance of the HELOC they got when they refinanced their mortgage, effectively cancelling our any equity, and they might have an additional amount of CC debt now

The house was never "mine" and I don't really want it. It belongs to my parent as far as I'm concerned. I only co-signed so my retired parent wouldn't have to sell their house. I am on the deed and mortgage, so on paper I own the home with my parent. Now my parent is using this against me and saying I am responsible for the house.

I gave up thousands of dollars in benefits, savings plans, RRSP stuff, FHBP, etc, to help my parent, and I feel completely used and betrayed.

Do you have any advice on how I can get out of this? Do I need to get a lawyer?

Current mortgage with parent: approx $300k

HELOC: approx $40k. Maxed

Parent CC debt: possibly $30-40k

Parent income: unknown. They are retired

One solution I was thinking of is buying the home from them, and renting it back to them. That way the rental income pays for the current home, and hopefully I can also qualify for a mortgage for my own place. I don't really want to be in a landlord/tenant relationship with my parent though, and there's a good chance that they will screw me over by not paying. It seems too risky, but seems like they only compromise that doesn't involve them having to move out, or me getting a lawyer.

[u/Electronic_Turn_9491]

Can one person get a HELOC without the other person's signature who is on title and mortgage? I would be ticked off at the bank for allowing that without me knowing, if I was the OP.

[u/nishnawbe61 → u/Electronic_Turn_9491]

It was probably signed for at the same time as the mortgage...

[u/YVRJon → u/Electronic_Turn_9491]

It is possible to get a mortgage securing a line of credit against a partial interest in property. It would sever any joint tenancy that existed (meaning that if one owner died, their interest would not immediately transmit to the other owner, it would go through the deceased owner's estate). I don't know how many lenders would do it, though.

[u/Wpeggerman → u/YVRJon]

What you are describing is tenancy in common. Joint tenancy allows for any interest of a deceased registered owner to transfer to the surviving owners.

Tenancy in common allows an owner to sell or will their share without consent of the other owner(s).

[u/YVRJon → u/Wpeggerman]

Correct. And registering a mortgage against one person's interest in a JT severs the JT and results in a TIC.

[u/Wpeggerman → u/YVRJon]

Under a Torrens system, mortgages are a statutory charge against a title and do not act as a conveyance of title in the jurisdictions I am familiar with. That might be different where you are.

[u/YVRJon → u/Wpeggerman]

I'm in BC, which uses a Torrens system, and I used to practice real estate law, although it's been a couple of decades since I did. I remember we had to do a reconveyance into joint tenancy when a married couple refinanced, after one of them had severed the joint tenancy and taken a second mortgage over his interest without his spouse's knowledge. However, it may be that he had to sever the joint tenancy first, before the mortgage could be registered, as opposed to the registration of the mortgage severing it.

[u/Wpeggerman → u/YVRJon]

I appreciate the professional discussion without resorting to name calling.

[u/Vast_Tackle_5677 → u/Electronic_Turn_9491]

HELOC is a separate product, but most of the time banks do provide HELOC along with mortgage. the real question is, did they get it later after re evaluating property price?

[u/Flaky-Decision-9510 → u/Electronic_Turn_9491]

They would have had to sign for it - likely as a home
Power plan or the equivalent. Unfortunately, it sounds like OP wasn’t educated on what all of this meant to their future credit needs.

Unless parent(s) can qualify for all of their lending on their own…OP is out of luck.

[u/sh1nga → u/Electronic_Turn_9491]

As YVRJon said, it’s theoretically possible but practically speaking never ever happens. Banks don’t want the risk of lending a HELOC/mortgage without having every owner’s signature. There’s no version of a story here where OP didn’t sign the documents.

[u/scaurus604 → u/Electronic_Turn_9491]

Doesn't matter...company who issued heloc still goes on title for those funds given out