@Anonymous wrote:
I apoligize, I guess I wasn't clear. To clarify it is a 3 bed 2 bath 2 car garage traditional brick house in a neighborhood. I have rented it for several years from a family member. That family member has passed away. The house is intended to be mine and can be transferred into my name at any time. The house is currently in my mom's name. My husband and I are looking to buy a new house with a VA loan. We haven't decieded if the current house in question will be sold or rented out, but it will be eventually transferred into my name. My question is: Should I leave the house in my mom's name and show the rent we have been paying for rental history (my mom would be able to verify the rent deposits) or should I go ahead and transfer the house into my name and show it as a house I own with out a mortgage on it? Since this was with family I do not have rental or martgage history reported on my credit.
Hi Tseries1,
It's better to leave the house in your mother's name (to show a rental history) than it is to show that you own the home free & clear for a couple of reasons.
1) Payment shock - if you show that you own the home free & clear, that means you don't have a housing payment now but you will with the new mortgage. Here's what I mean. Let's say your new mortgage payment is estimated at $1,500. It looks like you're going from Zero payment to $1,500, this is payment shock.
2) If you own the property, the taxes & insurance have to be counted in your debt to income ratios when qualifying for your new home so you won't qualify for as much.
Does that make sense?
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