FHA Non-Occupying Co-Borrower

I'm working on a deal currently where my customer needs to refinance in order to keep his home and remove his ex-wife from the existing mortgage and title. My customer has excellent credit but doesn't make enough money for his debt-ratio to qualify for a loan in today's tight mortgage market. His Dad has offered to help him out so that his son can keep his home and his grandchildren can continue to live in the home that they are accustomed.

Luckily, FHA has a program that allows a non-occupying co-borrower. FHA only offers programs for primary residences (no investment properties or vacation homes) but will allow the Dad to go on the loan and use his income and assets to qualify, along with the son's, and not be required to live in the house. The co-borrower's income and assets and credit are used as qualifiers, as well as their debts. And, it's important to note that the co-borrower is just as responsible for the debt as the borrower, even though they're not living in the home.

This is a great program for situations such as this, as well as for First Time Homebuyers when the parents are willing to help their children purchase their first home.

Another great thing about FHA mortgages is that they allow for up to 97% of the purchase price/value to be borrowed, requiring a modest down payment.

IS NOW THE RIGHT TIME TO BUY YOUR NEW HOME?

The simple answer to my question is YES. It makes sense that people who need to sell their existing house before purchasing a new one are stymied by current market conditions. BUT, this is a great time to be a First Time Homebuyer or renter looking to own again. From all accounts, real estate prices in our area are near bottom. Mortgage rates remain low, at least by historical standards, and it's a buyers market. What more could you ask for?

All you need to do is get yourself pre-qualified by a mortgage broker, which basically gives you the clout of a cash buyer and will let you know the price range that you can afford, get yourself a good realtor, and start looking for your new home! There's plenty of inventory to choose from.

If you aren't concerned with getting settled into a new school district by the beginning of September, you have an even greater edge. It is a very difficult time to be a seller right now and many homes are not priced for this market (they're still priced at last years values). A good realtor will be able to help you with making a fair offer.

If you're a first time homebuyer who's sick of renting or living with your parents, what are you waiting for?

100% Mortgage Financing is Still Available

Contrary to popular opinion, it is still possible to finance 100% of the purchase price of your new home AND have the seller provide between 3-6% to cover closing costs! You can basically move into a new home with little or no money coming out of your pocket. This is especially important for some First Time Homebuyers who may not have accumulated a large enough nest egg to but down 10-20% to purchase a home in NY or CT, where I do most of my business and home prices remain high.