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So I am not sure if anyone here can help me with this issue, but I am currently in a bind. My father is an older gentleman in his golden years, retired, and owns his own a rental property in California, he has put his rental property under my name, my sister, and my brother so to leave us as owners when he passes away. My father however is living off the property while we pay taxes lol, anyways it's adding about 30k to my 100k salary on paper. I am wanting to get my first property here in Washington state this coming year, I know the added income should help me with this, however, my mother wants me to cosign on a property in California for her to get since she's retired and her fixed income is not enough to qualify. So my question is if cosigning for my mother will negatively affect me in getting my own property? I've been told that if the property pays for itself and is seen as an investment property it shouldn't affect my own pursuit for property in WA, does anyone know what my best option should be?
Yes, cosigning for your Mom will hurt you when trying to buy your own place. Have you considered that, if her fixed income isn't enough to qualify to buy on her own, she may not be able to pay her mortgage plus taxes and insurance either.
Unless the rental is an apartment building, how is it adding $30k to your income for qualifying purposes?
Really too complicated answer based upon the info you have provided. Each property will have a mortgage, equity, and then there is your income.
Its a mathematical equation as to how many properties you can own based upon your salary and debts. And you can only own 4 mortgaged properties at really low personal rates.
That said..... I wouldn't cosign for anyone, anything, ever. If they cant afford something, they need to think about something they can afford.
Your mother needs to find housing that she can afford on her own. When you co-sign a loan, you are accepting responsibility to make the loan payments on your own if your mother cannot. Then there is also upkeep and taxes. If your mother is older, there is a good chance that health expenses or other issues could affect her ability to pay sooner than you may think.
My rule is never co-sign with anyone for anything for any reason. The person you're co-signing for will inevitably end up being a train wreck for you. Seen it every time I've come across it.
Just so you are aware, in order for a co-signed debt not to be included in your debt, you would have to provide a 12 month history that mom has made the payment on her own (so if you are on her checking/savings accounts, you need to come off). That documentation, showing no late payments along with a letter from mom they she will continue to assume responsibility of all future payments will remove this debt from your qualifying. This is true for conventional, FHA, and VA loans.
So I am not sure if anyone here can help me with this issue, but I am currently in a bind. My father is an older gentleman in his golden years, retired, and owns his own a rental property in California, he has put his rental property under my name, my sister, and my brother so to leave us as owners when he passes away. My father however is living off the property while we pay taxes lol, anyways it's adding about 30k to my 100k salary on paper. I am wanting to get my first property here in Washington state this coming year, I know the added income should help me with this, however, my mother wants me to cosign on a property in California for her to get since she's retired and her fixed income is not enough to qualify. So my question is if cosigning for my mother will negatively affect me in getting my own property? I've been told that if the property pays for itself and is seen as an investment property it shouldn't affect my own pursuit for property in WA, does anyone know what my best option should be?
You should consult with a lawyer familiar with trusts and probate issues immediately. How long ago did this happen? Unless your father retained a life estate in the Deed, it is generally a bad idea to transfer assets as a gift. That way, you are stuck with your father's original basis in the property for tax purposes; whereas if it's inherited you receive the stepped-up basis. You could potentially be hit with a huge tax bill if asset transfers aren't handled properly. I'm not sure if what has been done can be undone, but you should seek appropriate legal advice immediately.
You should consult with a lawyer familiar with trusts and probate issues immediately. How long ago did this happen? Unless your father retained a life estate in the Deed, it is generally a bad idea to transfer assets as a gift. That way, you are stuck with your father's original basis in the property for tax purposes; whereas if it's inherited you receive the stepped-up basis. You could potentially be hit with a huge tax bill if asset transfers aren't handled properly. I'm not sure if what has been done can be undone, but you should seek appropriate legal advice immediately.
This happened earlier this year, his name is off the property already, so if his name is off the property will this still be an issue?
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lol, anyways it's adding about 30k to my 100k salary on paper. I am wanting to get my first property here in Washington state this coming year, I know the added income should help me with this, however, my mother wants me to cosign on a property in California for her to get since she's retired and her fixed income is not enough to qualify. So my question is if cosigning for my mother will negatively affect me in getting my own property? I've been told that if the property pays for itself and is seen as an investment property it shouldn't affect my own pursuit for property in WA, does anyone know what my best option should be?
