Source of Funds - Home Equity Loan

Hello, I’m Vaughan de Kirby. Today we’re gonna talk about a source of funds that we see frequently, and that’s the home equity loan. That’s acquiring a loan based on equity that you have in a particular piece of real property.

Now two aspects that I want to bring up in the very beginning: in some jurisdictions, a property is held in other people’s names. It’s very important for you to know that if in fact you’re going to get a loan on a piece of property, it must be in your name. If it is in your name and your spouse’s name, you’re going to need an affidavit from your spouse authorizing this loan and your spouse should be part of the loan. The other aspect that you need to remember here is you’re using a piece of property as your security. Therefore, in addition to documenting the loan, you’re going to need to document the source of the funds you used to purchase the property originally. That means you’re going to have to go back to when you purchased the property and show that the funds you used for that purpose were in fact arrived from a lawful source. Now let’s talk about a list of some of the documents that we believe will be required if you’re going to use a real property or home equity loan.

You’ll need your property purchase contract. Property sales invoice, that’s when you originally purchased the property. Your tax deed certificate. Property ownership certificate. Mortgage contract, if in fact there is a mortgage on your property.  Settlement of the mortgage, if in fact you may have paid off that mortgage.  An appraisal report. This is very important. You need to show that the appraisal is in fact realistic based on the loan that you’re acquiring. The loan company’s business license. This is something that I want to clarify also. After 9/30/2016, it’s very possible that the sources of your equity loan on real property may be very limited to certain authorized or licensed banks. We don’t know for certain, but we do anticipate that will be part of the new legislation. You’ll need the loan contract. And as I said earlier, if you own the property jointly with your spouse, you’re going to need an affidavit from your spouse authorizing the loan, and the spouse should be a part of the loan document. Proof that the funds from the loan were released to you, as the investor, that would be from the lender, and then your bank will need to provide a statement showing that the loan funds went into your account so we can trace them into your account. 

Now as in all source of funds, this is a lot of documentation, but it’s very important because USCIS is very strict in their requirements. You’ll work directly with your investment immigration attorney to determine what documents are required in your case. But in watching this video, you’re ahead of the game, because you understand what’s necessary, if you’re going to use a home equity or real property equity loan as your source of funds. I hope this information is helpful.

If you have any questions, please don't hesitate to contact us or call 415-221-3500.

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