So, the real question is how he can extricate himself from the equity he has locked into (and the debt obligation) of the first home. And that quickly gets complicated. Assuming his half of the equity in the home is 1/2 of the $125,000 you mentioned, or about $75,000 — how about suggesting your older son’s bride chip in to buy him out? That wouldn’t necessarily invalidate the mortgage obligation if a good attorney sets the documents up correctly.
Or you could buy out his share of the equity, reducing his ultimate inheritance by that amount. Then he would have the $75,00 cash equity to buy a new home, or use for whatever purpose. And if you want to co-sign his new mortgage, that might help him buy the new home. You need a good mortgage lender to help you figure this out. Try my pal Leslie Struthers — Leslie@rate.com. I’ll be she can figure out a solution without giving up that great 3% mortgage!!