Posted on: 13th Dec, 2009 10:01 am
I currently have a home in another state that I am in the process of selling, however, although I have a buyer already living in & renting the house, it is not "sold" as of yet. I have found a great buy at my current location, but due to the fact that I am recently retired and have a mortgage already, I cannot qualify for a loan on my own. My daughter has offered to co-sign the loan --- she has a very good income and only one very small debt. However, the bank will still not loan us the money stating that the debt to income ratio is too high. My question is, how much of the co-signer's income counts? In my case it would appear to be very little. My daughter could easily qualify for the loan on her own, if this was going to be a her primary residence. She could also qualify for a loan to buy the house as an investment property, but would have to put down 20% which is not feasible at this time.
Any insight on how this whole co-signer process works would be greatly appreciated.
Any insight on how this whole co-signer process works would be greatly appreciated.
The bank will use ALL of the income and debt for BOTH borrowers. Other than co-signing, the only other option you have is for the seller of this new home to hold a mortgage for you during the first year.
are you trying to obtain a conventional loan or an fha loan? the latter has less-restrictive requirements for a non-occupying coborrower.
I have a similar situation as ELM1040. I currently own two condos and I'm trying to purchase a house while the prices are affordable. I rent one condo and live in the other. On paper my debt-to-income ratio is too high. My mom is willing to co-sign and she would qualify on her own but since she'll be a non-occupant coborrower, Chase says they can't include her income. This may just be Chase, but they told me it was new regulations that recently went into effect. Is there a reason why we wouldn't qualify?
Gmarkerley, what's the difference requirement wise between a conventional and fha?
How can I make this work?
Thanks!
Jay
Gmarkerley, what's the difference requirement wise between a conventional and fha?
How can I make this work?
Thanks!
Jay
I believe that might be a Chase guideline. If the purchase is for a primary residence, you can use a non-occupying co-borrower through FHA. On conventional loans, I believe most will allow up to 90% w/ a non-occupying co-borrower but, there are more guidelines involved.
with conventional loans, a primary borrower must qualify on his or her own, i.e., with acceptable debt ratios. there have been lenders in the past who had special consideration from fnma/fhlmc and they could do these loans with elevated ratios, but those are dinosaur-like these days.
with fha loans, the incomes of the borrower and the co-signer are blended and the resulting ratio ends up favorable, thereby allowing approval.
i'm sure chase is not alone with this issue.
with fha loans, the incomes of the borrower and the co-signer are blended and the resulting ratio ends up favorable, thereby allowing approval.
i'm sure chase is not alone with this issue.
Thanks guys!
I think the problem I'm running into is FHA's guidelines about Buy and Bail. Since I already own two properties I think they are afraid I'm going to do this even though my rental property has been rented for over a year now and I won't have a problem renting my current condo at a price I can break-even on. And you just informed me what I think Chase was saying, in that conventional loans don't consider income of co-borrower.
If my mom were the non-occupant primary borrower and I was the occupant co-borrower, would it be considered an investment property still and could I claim the interest on my taxes?
That's pretty much my goal, it doesn't matter how it's done. We want to be able to put 10% down and have me be able to deduct the interest on my taxes.
I have excellent credit, score above 750, it's just the two properties hurting me right now.
Thanks again!
I think the problem I'm running into is FHA's guidelines about Buy and Bail. Since I already own two properties I think they are afraid I'm going to do this even though my rental property has been rented for over a year now and I won't have a problem renting my current condo at a price I can break-even on. And you just informed me what I think Chase was saying, in that conventional loans don't consider income of co-borrower.
If my mom were the non-occupant primary borrower and I was the occupant co-borrower, would it be considered an investment property still and could I claim the interest on my taxes?
That's pretty much my goal, it doesn't matter how it's done. We want to be able to put 10% down and have me be able to deduct the interest on my taxes.
I have excellent credit, score above 750, it's just the two properties hurting me right now.
Thanks again!
going with a non-occupant primary borrower and an occupant co-borrower will only confuse everyone on the planet. that's not even a viable method by which to get the loan at all. i have to ask you how in the world did you come up with that plan? it's untenable and unrealistic, i'm afraid.
if you plan to do an fha loan and you can get past the hurdles of the other two properties, you can put as little as 3.5% down. conventional is out of the question, as we discussed, due to the ratio issue.
if you plan to do an fha loan and you can get past the hurdles of the other two properties, you can put as little as 3.5% down. conventional is out of the question, as we discussed, due to the ratio issue.