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Pleding a house as collateral possible without owning it?

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They can't legally use someone else's property as collateral for a loan

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They can't legally use someone else's property as collateral for a loan

If the buyer needs a mortgage to buy their house, then how can they pledge their house as collateral?

If the buyer owns the house, then why would they need a mortgage?

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I've seen this done in commercial lending. Can be real estate, stocks, savings accounts, etc. Whether a lender will do it depends on the size of the loan, and there may be extra legal fees to the bank's attorney.

Let's say a parent wants to help a child out, and owns something - home equity, stock portfolio, bonds, etc. The bank may want a secured guaranty, not just a personal guaranty (co-borrower). Or, the parent may not want to give a blanket guarantee but is willing to pledge specific assets. The parent (guarantor) executes a guaranty and pledge agreement, which may result in a lien recording.

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