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September 19, 2008
parents as co-borrowers
I was wondering if anyone has had recent success in obtaining a mortgage using their parents income in order to borrow more $ without getting an investor's rate. My mortgage broker can do this with an FHA loan however paying the monthly mpi seems ridiculous when we are putting 25% down and we have excellent credit scores. From recent mortgage posts, it seems like people have been having luck with rates by going into local banks/credit unions with their situation as opposed to internet shopping. Anyone recently got a mortgage with help from Mom and Dad?
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I had a relative recently serve as a co-signer on her daughter and son-in-law's mortgage. In their case, though, the kids had crummy credit scores, were self-employed, and wanted a jumbo loan. There was basically no way they would have gotten a mortgage without mom signing on.
Posted by: fawn at September 19, 2008 12:13 PM
Talk to Adam Dahill who has posted under mortgages. His contact info is on his profile or you can google him.
Posted by: daveinbedstuy at September 19, 2008 2:29 PM
Why are you having to pay mpi if you are putting at least 20% down? I though that such insurance was not usually required unless you put down less than 20%?
Posted by: 1842 at September 19, 2008 3:26 PM
to 1842, all Fha loans have mpi which is sort of pmi fee that has to be on the loan for the first 5 yrs. It is infuriating to me, like you said, we are going to put 25% down.
Thanks Daveinbedstuy, I am going to contact Adam Dahill.
Posted by: bqe1970 at September 19, 2008 4:36 PM
You can absolutely use your parents as co-borrowers. Of course you will then be qualified based on your total combined income but also based on your total combined liabilities. Everyone's scenario is different. I'm sure you did your due diligence and you need your parents income. But perhaps not? Also, you mention investment property rates? Are you looking to purchase an investment property? Sunny_hong@countrywide.com
Posted by: shong1 at September 20, 2008 2:10 AM
Hi Shong,
Thanks for your feedback. I'm not purchasing an investment property, I'm purchasing a 2 family, owner occupied. Another reason I really want to try to for 6% rates. Yes, the problem is that I need my parents income to borrow what I need. Everyone has excellent credit. Our total liabilities are nominal so I feel I may not be with the right mortgage broker. Certainly there are plenty of parents who help out their kids in the NYC area.
Posted by: bqe1970 at September 20, 2008 11:47 AM
bge1970 - you may feel free feel to email me with any specific questions yu may have. Since you are purchasing a 2 family home you will also be able to use 75% o th amret rent for the second unit as rental income. Depending on your situation you may be able to get a conventional loan as opposed to FHA. The determining factors are down payment and loan amount. Do your parents curently own their own home?
Posted by: shong1 at September 20, 2008 2:28 PM
Hey Daveinbedstuy, thanks for the referral.
To clarify you may use your parents as co-signers on a converntial Fannie/Freddie loan but it might not help as you the primary borrower are still required to meet certain debt to income ratios. The AUS (automated underwriting system) will allow the loan to be approved with higher debt to income ratios with the presence of a Non Occuping Co-Borrower but without looking at the full file I really couldn't tell you if it will be approved.
FHA loans allow for the total income of all borrowers (occupying and non-occupying got be used for debt to income calculations. With FHA loans you will have the 1.25% upfront MI added to your closing costs as well as .5% monthly MI regards of the downpayment. The 1.25% is financed and you won't have to come out of pocket for it.
Fannie/Fredie will let you use 75% of the other rental unit but FHA will let you use 85% of the rental unit.
I understand that you would not like to pay the MI but if you can not get approved Fannie/Freddie you may have not have a choice.
We can also look at a "dare I say" Stated Income product and compare all three choices to see what makes the most sense for you and your family.
For those that want to get ahold of me you know where to find me.
Posted by: Adam Dahill at September 21, 2008 11:14 AM
excuse the spelling errors. I didn't have my coffee earlier.
Posted by: Adam Dahill at September 21, 2008 1:21 PM
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