Getting a parent to sign for home??

[lilman22]

We are out of options right now.  Too much to work on ..on the credit reports at this point, but still not giving up.  It is going to take up at least two years most likely to qualify.  My question is:  Can we get a cosigner, like a parent to sign for us.  His parents have GREAT credit, but will they accept that if they are their ages?  70's?  They have told us they are willing to, but we aren't sure we want that yet.  Asking a Mom or Dad is a hard thing to do you know?

But...when it comes down to it, I guess we either have to wait, or let them try that avenue for us.  I think we could get it in our name after a few years right?  I am the one against it, but my hubby is the one thinking "maybe."  I just don't know if the lender will accept that.  His Dad is retired, does that matter?

I am just a lurker here, and not well educated on credit stuff...but trying.  I just hate asking someone to do this!!  I am not one to do that.  He, however, says they don't mind, and would be happy too no matter what.

I am tired of trying to repair the credit with all the letters and such.  Two years is not that long, but we are both in our 50's living in an apt.. and want a home.....it is time.  But, like so many, he made mistakes.  His income is 80,000 a year, and we sit in this apt.  UGH!!

Didn't mean to make this so long, just asking ya'lls opinion.  Please, be nice.  I know this is not a good thing to ask people to sign for you.  It makes a person feel really bad.  That would be ME.  lol   I'm old school I guess, and have my pride.

Thanks.

[StartingOver10]

lilman22, this is a difficult question.

FHA does allow non-occupant co-borrowers on the loan. That would include people like your husband's parents.

What are the specific issues that prevented your approval? Credit only?

[Gunnar419]

Agreed that more info is needed before anybody can give really solid advice.

You should know, however, that you won't be able to just switch a mortgage over to your name in a few years no matter how much your credit improves. You would need to refinance the house at that point, paying all the standard costs for that.

I apologize if this sounds negative, but one thing that would make a difference if I were in your shoes is age, not the parents' age, but your husband's. It sounds as if you may be a non-earning spouse? Your husband's income and credit are what you'd use to buy (or later refinance) a house? If he's in his 50s and has bad credit as a result of something unforeseeable (like temporary job loss or disability), that's one thing. But if he's in his 50s and has bad credit because he's never learned to manage credit well, then I'd urge you and him to work together to fix that problem and practice good long-term credit management before taking on the expenses and unknowns of owning a home.

Good luck!

[Peter1142]

I don't understand how this non-occupant co-borrower thing works. If you have an occupant co-borrower, the worse of your credit is used, how can a non-occupant co-borrower use the better of your scores? And I don't see how it would be a good idea to use non-occupant co-borrower's income, unless only a compensatory factor is needed.

[sr383]

Assuming cash flow and credit habits are good, I'd accept help, if they're willing to give it.

I have no insights about where the marketplace is going, but if prices and rates keep trending upward, you might not be able to buy near the house in two years that you could have bought today.

I would strongly suggest a 15-year loan (20, at most). I wouldn't want to be making mortgage payments as a retiree. ...

[StartingOver10]

One of the items to check is that FHA has a qualifying assumable loan too.  If your husbands parents are non-occupant co-borrowers and the loan is a qualifying assumable loan, presumably you and your husband would be able to assume the loan with full qualifying at some point in the future.

You would need to speak with a LO about this specifically though. I don't have details. As far as I know, only FHA and VA offer the qualifying assumable loans.

Also, agree with the others above. If this situation you find yourselves in now is as a result of some one time hardship, that is one thing. But if this has been ongoing, don't burden his parents with a loan that can't be taken out of their names in the short term (a couple of years).

Right now there isn't enough detail in your post to know which way to guide you.

[ShanetheMortgageMan]

Additional information on the co-signing thing:  The income & debt payments of all people (occupants & non-occupants) are mixed together to determine if they qualify, that includes the non-occupants own housing payment as well (whether they own or rent).  Credit of all applicants needs to qualify, so if the minimum score requirement is 620 and the occupants have a 619 and the non-occupants have a 720 then it's a no-go since not everyone meets the credit score requirement... same with if the occupant has a Ch 7 BK dischage before the date the guidelines say it's acceptable but the non-occupants never have had a BK.  Now the situation that a non-occupants credit can help qualify is if the occupants have borderline qualifying credit, i.e. a 620 score with the minimum score requirement being a 620... I've seen situations where the underwriter hasn't been comfortable unless there is another borrower with better credit (whether it's needing a non-occupying co-borrower or even in the situation with adding the spouse with better credit who would be occupying the house anyway).  As long as someone is old enough to enter into a financial binding contract (usually 18) then age doesn't matter, it'd be illegal to discriminate based on age and it's fine if applicants are retired (many people are retired and are able to qualify for a mortgage as long as their retirement income qualifies for what they are trying to get financed for).