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Help Your Child or Your Parent Buy a Home

Today’s underwriting rules can be fairly stringent on which income can be counted and how it is calculated.  For example, income such as overtime, commission and bonus income must have a 2 year history of receipt and your employer must state that it is likely to continue in order to be included in qualifying for a home loan. 

Your child or family member may feel they can afford the monthly payments but with today’s underwriting rules, they may need your assistance to help them qualify for new home financing.

Down payments can be as little as 3.5% down using FHA financing and 10% down using conventional financing.  FHA financing allows all of the down payment to be gifted to them.  The conventional programs require the occupant to provide the first 5% of the down payment from their own funds and anything beyond that can be gifted to them.

When co-signing under these programs, all income and debts are completely combined from both the occupant and non-occupant.  After combining all this information, then the standard qualifying debt ratios are applied.  Minimum credit score requirements are applied to all applicants.

After the occupant has lived in the home for 1 year, been on title to the property 1 year and made the monthly mortgage payments for 12 months out of their bank account, they may be eligible to refinance or assume the loan into their individual name.  They will be subject to all current qualifying criteria at that time.

Source: The Carmel Valley Life

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