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We want to buy a house for our daughter who is on social security and not have it be investment properity. I heard that we could be a co-signer and it would be in her name. She is on a fixed income with her social security payments. Will lenders let her apply for the loan with that being her only income? She has no credit score but we have excellent credit and can afford to pay the mortgage payments for her. I just don't want to pay 20% down payment and wipe out my savings.
I agree with the others that co-signing is not a good idea 99% of the time, but those situations are (I think) when someone else is saying that THEY will pay the mortgage, they just want you as a back-up and "of course we'll never need you to make any payments." THAT'S when there can and often will be problems later.
In your case, you will be making the payments from the start and are fine with that. So it actually sounds like you want to buy a second home and let your daughter live in it rent-free. The problem there is that I think most financial institutions want relatively large down payments on second homes (as is the case with investment properties -- where I live, banks want 25% down on investment properties). So you may be stuck with having to make a large down payment.
Call a few financial institutions in your area and ask them!
IMHO this is a real bad idea. If you do not have a large investment portfolio to fall back on you may find yourself cash poor in the future. In todays economy income flow can be altered at a drop of the hat, there are no guarantees.
I just don't want to pay 20% down payment and wipe out my savings.
Sounds like what you want and what you can afford are not the same thing.
If your savings are equal to 20% of the downstroke, it makes no sense for you to consider buying a property for your daughter under any circumstances. Cosigning a loan is never a good idea.
Everyone seems to be concerned about the daughter not paying (along the lines of, "you might think your daughter won't default, but you never know"), but it sounds to me like the OP is planning to pay the mortgage FOR the daughter from the start, so the usual "don't-co-sign-under-any-circumstances" might not apply.
Everyone seems to be concerned about the daughter not paying (along the lines of, "you might think your daughter won't default, but you never know"), but it sounds to me like the OP is planning to pay the mortgage FOR the daughter from the start, so the usual "don't-co-sign-under-any-circumstances" might not apply.
I agree, it wasn't clear what the intent was in the original post.
Quote:
Originally Posted by middle-aged mom
Sounds like what you want and what you can afford are not the same thing.
If your savings are equal to 20% of the downstroke, it makes no sense for you to consider buying a property for your daughter under any circumstances.
Thank you everyone for your posts. I finally have found a way to buy a house with a FHA loan. You put 3.5% down, we own it and it's not a second home but a primary resident without the 20% down as with a conventional loan. FHA was setup so that people with low incomes can buy homes. This is really good news, if now we could find one in our price range. I have learned alot about mortgages and I'm so glad I found out FHA, I was ready to give up.
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loan for daughter
