My Mom Wants To Help Me Get A House But...
Her credit is good. My FICA is 637. I can't show proof of enough income so need to do stated income with (interest only payments. Not ideal.
Mom wants to www.help.Idea: She purchases and gives me lease option which will build my credit during the lease period. We can make it a break even deal for her so she won't have to pay taxes on the income. I can pay the RE taxes etc in my payment.
But is there another way to purchase the property with my name on it if she isn't going to live in it with me? I was told 'no' by my preapproving lender.
But what if we went partners and bought it as an investment property and rented out two bedrooms. Could I still ive in it as half/owner?
Would they look only at her credit for purchase and not mine?
Back to lease option, is that the best way and what form)s) do we need and where do we get them?
Thanksomuch
I'm going out on a limb here but it could be possible to simply allow your mother to go through the purchase of the home then "quit-claim" you on the deed.
This might be one viable option.
SacVestor
Ask about a Stated Income loan,b ut you may need to have the right LTV.
Best to you
Sire
Well, asking the lender was a mistake. They 9 out of 10 times, only think about your conventional real estate transactions. They don't play like we do. We use creativity and ideas that your average joe wouldn't dream of thinking up.
The problem with a quit-claim, is that the bank may call the note once they find the property is not in your mothers name anymore (which could take 3-6 months or more, but they want the remainder of the funds up front.)
An idea for you, would most likely find a multi family. Somthing with good rents where you can get cashflow or break even for living there. I would pursue a non income stated loan, to find out what you wouuld qualify for, and buy something that has good cashflow, so hopefully youonly have to pay utilites out of pocket.
With respect to Briddog1, the bank will probably not call the note due if they discover the transfer because one of the DOS exemptions spelled out in the Garn St. Germain Act is...
"a transfer where the spouse or children of the borrower become an owner of the property"
Have your mother notarize and record a Gift Deed in order to convey the title to you. The consideration on a Gift Deed is "love and affection" instead of money. Your mother will still remain on the loan, however...maybe you can co-sign?
Definitely sit down and talk to a qualified CPA or financial planner to discuss any potential tax ramifications either for yourself or for you mother.
MalibuTutor,
You said that you do not have "proof of income" ? Is the problem not having proper documention or the actual income.
If docs are the problem then go for a NINA. No income verification. You will pay a little higher rate but you will then be establishing some more credit for yourself and you can refi once seasoned.
I know of a lender that will do a NINA with 5% down and 620 FICO. Can't say who it is here...but they are out there.
i work as a broker and i know that if you can find a mortgage broker in your area who will work with you, you can get a loan going stated even with your credit score to 100% ltv, you just gotta find someone who knows what they are doing. and another thing, stay away from the direct lenders, you'll end up paying more. i would also try to not have your mom co-sign because i have seen to many co-signs go bad. also if you want to build credit, you need the loan in your name.
See if this helps:
In 12/99 I purchased the home that my then divorcing son wanted. Best to keep it out of his name per divorce. Lender allowed me to take it as a 2nd home. Son moved right in and started rehab and paid ALL bills straight to everybody, showing it was his home. We drew up and signed doc showing it was his home and would be transferred to him as soon as reasonable, making him responsible. Every year, I assigned all tax benefits to him (as I was his 'no profit' lender) and he took the deductions. I never counted this as a rental in any way...no losses, no gains. When ready, 10/02, he applied for a loan, and I assigned ownership to him for 0$, just 'love and affection.' Now, some IRS/CPA pros said this was questionable, others said it was fine as long as we had the doc making him accountable, he paid the bills, and we were consistent and traceable. We were. :-?
I'm a mortgage broker and I specialize in getting people into homes with no money down and with stated income. With a 620 score, you could go 100% with like a 6.5% rate. Not bad. Also, you could use 12 month bank statements to go full doc. Your probably better off going that way because most lenders these days do not allow non-occupant co-borrowers.