FHA Loan- Parent Co-Signer

Under the FHA rules, a parent can co-sign a loan for their child.  The property is owned in the child’s name, not co-owned with the parent.  FHA puts all of the income and debt into one calculation, so it is possible to have a child who does not earn any income purchase a property using FHA financing with a parent co-signer.

Regarding the number of properties that can be purchased, it appears that we’re in a grey area.  An FHA buyer cannot buy another property using FHA unless the previous home has been sold.  That specific rule doesn’t apply to a non-occupant co-borrower, so a parent who has an FHA loan can co-sign for an FHA loan for their child.

The discussion of multiple properties financed this way is addressed, the specific comments are:

“Transactions in which parents help their children buy their first home are permitted as long as the non-occupant co-borrower is not developing a portfolio of rental properties”

and

“The amount of the financial contribution by the non-occupant co-borrower and the number of other properties similarly owned must be looked at closely.”

So, if you’re co-signing parent has a bunch of other properties, then we may be in trouble.  If the kids involved are close to qualifying in their own, especially if they all live in different areas, then we should be ok.  Obviously, if the kids all buy houses right next to each other, then we’re in serious trouble.

To search for Cincinnatti homes on MLS click:

www.kevinduffy.com

Getting Pre-Approved!

It is extremely important that you connect with a qualified lender. We can recommend lenders who have earned our trust and with whom we’ve had good experiences in the past. The lender will review your financial position to determine the price most suited to your ability to pay and your comfort level.

The Pre-Approval Process will help you in the following ways:

>You will know in advance what your payments will be.

>You won’t waste time considering homes you cannot afford.

>You can select the best loan package without being under pressure. There are many options and programs to choose from in today’s market. Your lender will explain the alternatives to help you select the one best suited to you.

>Sellers will find your offer to purchase more favorable if they know in advance of your ability to secure financing. This will make your offer more competitive if you are in competition with other offers. Nowadays, most listing agents require a pre-approval letter to accompany all purchase agreements.

>You’ll have an estimate of your closing costs and we will explain them to you in detail.

>You’ll have peace of mind.

Best piece of advice!

Take the pre-qualification one step further and get a full loan approval. This is the best approach!

When Viewing A Home, Always Be On The Lookout For These Things Even Before You Hire An Inspector

Home IconMore and more people are considering purchasing houses that are being sold due to foreclosure or at auction. Many of these homes may have had lapses in maintenance or other issues that home buyers must be wary of. Never purchase a home without hiring an inspector to look it over first. Here are some of the problems that you can be on the look out for during the viewing stage, which can cause a buyer significant and costly problems:

  • Too many homes for sale on the street. Are any boarded up? Always keep an eye on the other houses near the one that you may purchase. They will tell you a lot about your possible future investment.
  • Outdoor maintenance is often very telling of what is going on “underneath”. If the home you are looking at has straggly foundation plants or broken gutters, what else could be wrong?
  • Foundation damage is always a major consideration. Check for proper grading and cracks bigger than 1/3 of an inch. Many times this can mean major structural issues.
  • Strong odors outside and inside almost always indicate something “bad”. Investigate further.
  • Be on the lookout for flickering lights and always check face plates for heat. This could mean faulty wiring.
  • Windows with fog or water in between double-paned windows can signify trouble lurking.
  • Stains and/or saggy walls usually indicate water damage, mildew or mold. An inspector must check for leaks and mold.
  • Keep your eyes peeled during your tour for pests and rodents. Seeing evidence at this early stage is never a positive sign.