Posted on: 13th Jun, 2007 06:11 pm
if my brother in law has better credit than my husband,and owns a very expensive home. although my credit is around 689, my husband makes the more money of the two of us. his brother suggested he qualify because he\\\'d get better interest rates than quit deed the home to us. would the same rates apply. would we than own the home ourselves or would he still be on the deed. is this a good idea?
hi ana,
welcome to mortgagefit forum.
apart from credit score you also need to compare income and dti ratio you have with what his brother has as for some loans credit score is not the main factor based on which a person gets approved for loan.
now if your husband's brother purchases the house in his name and quit claims back to you, as title ownership will change lender can ask for the loan to be refinanced in your name (you need to know that quit claiming will only transfer property interest, mortgage will remain in his name). if however you do not tell the lender about the title transfer and somehow later on he becomes aware of it then he will immediately demand full pay off.
if you were to refinance that time then you will have to go through qualifying guidelines to be approved for the refinance. and you may face similar problems which you are trying to avoid right now. and it can also happen that rates go up at the time you refinance.
the advantage in his proposal would appear if he keeps the house for a certain number of years and in those years your income and credit score improves which would help you qualify for better rates on your own. and you live in the house & continue to make the payments but to not go ahead with the ownership transfer.
colin
welcome to mortgagefit forum.
apart from credit score you also need to compare income and dti ratio you have with what his brother has as for some loans credit score is not the main factor based on which a person gets approved for loan.
now if your husband's brother purchases the house in his name and quit claims back to you, as title ownership will change lender can ask for the loan to be refinanced in your name (you need to know that quit claiming will only transfer property interest, mortgage will remain in his name). if however you do not tell the lender about the title transfer and somehow later on he becomes aware of it then he will immediately demand full pay off.
if you were to refinance that time then you will have to go through qualifying guidelines to be approved for the refinance. and you may face similar problems which you are trying to avoid right now. and it can also happen that rates go up at the time you refinance.
the advantage in his proposal would appear if he keeps the house for a certain number of years and in those years your income and credit score improves which would help you qualify for better rates on your own. and you live in the house & continue to make the payments but to not go ahead with the ownership transfer.
colin
"Would the same rates apply. would we than own the home ourselves or would he still be on the deed. Is this a good idea?"
At the time home is quit claimed back to you and you refinance it might be that rates have changed in the upward direction. It will depend on how rates are at that time only. But it is likely that it may go up.
However, if this loan would have assumption clause then you will be able to assume the mortgage for the same rate that it will have before the assumption.
" would we than own the home ourselves or would he still be on the deed. "
And after the deed is made out he will not remain on the title.
At the time home is quit claimed back to you and you refinance it might be that rates have changed in the upward direction. It will depend on how rates are at that time only. But it is likely that it may go up.
However, if this loan would have assumption clause then you will be able to assume the mortgage for the same rate that it will have before the assumption.
" would we than own the home ourselves or would he still be on the deed. "
And after the deed is made out he will not remain on the title.
Hi longforsnow,
If your brother-in-law qualifies for the credit, he should have his name on the title to the property. Otherwise, what you can do is, make him the cosigner so that you and your husband can have your names on the property. Also, you can use your brother-in-law's credit to qualify for the loan. And when you do, the same rates will apply. It seems to be a good idea.
Thanks
If your brother-in-law qualifies for the credit, he should have his name on the title to the property. Otherwise, what you can do is, make him the cosigner so that you and your husband can have your names on the property. Also, you can use your brother-in-law's credit to qualify for the loan. And when you do, the same rates will apply. It seems to be a good idea.
Thanks