Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My husband and I are planning to relocate to Tucson, AZ. We would like to buy a house, except we're twenty-something and don't have much of a down payment (we're saving, though).
I think the general consensus is that the banks are a little shy of loaning to twenty-somethings without a down payment. So, I was thinking that perhaps my father could cosign for us.
He and his wife live in NY (on Long Island) and own a house on which they have two mortgages (one for the house, one for an addition and upgrades). I don't know much else about their credit history of debt because I've never asked. They have not-old cars, but I don't know if they make payments or own them outright. I know they both get paid decently (my dad owns a business, my step-mom has a steady, well-paying job), but that's about it.
What do you think? Would it work? Would it help? I don't want to ask them for money because I honestly feel they wouldn't have the cash to just send us, but they might be able to lend us some of their credit instead.
My husband and I are planning to relocate to Tucson, AZ. We would like to buy a house, except we're twenty-something and don't have much of a down payment (we're saving, though).
I think the general consensus is that the banks are a little shy of loaning to twenty-somethings without a down payment. So, I was thinking that perhaps my father could cosign for us.
He and his wife live in NY (on Long Island) and own a house on which they have two mortgages (one for the house, one for an addition and upgrades). I don't know much else about their credit history of debt because I've never asked. They have not-old cars, but I don't know if they make payments or own them outright. I know they both get paid decently (my dad owns a business, my step-mom has a steady, well-paying job), but that's about it.
What do you think? Would it work? Would it help? I don't want to ask them for money because I honestly feel they wouldn't have the cash to just send us, but they might be able to lend us some of their credit instead.
Does that make any sense? Is that how it works?
If you have to get a co-signer, it's because the lender believes there is a significant chance that you will default on the loan, and therefore, seeks to find someone else w/good credit to back it also and they are responsible for the payments in the event that you do default. If you get a $100,000 mortgage, and decide not to pay it, they are on the hook as much as you are.
Co-signing a loan is just plain dumb, I know this is a money forum and not a religious forum, but Proverbs 17:18 says, 'It's poor judgement to guarantee another person's debt or put up security for a friend.' And that is wise counsel whether you're Christian, Jewish, Muslim, Atheist whatever, it's just poor judgement.
On top of that, you're going to have you father co-sign which as Carl Lewis says, "uh-oh!" The minute you have a problem w/making a payment or get behind and they call your father, there will be a huge tension between your husband & you and your parents.
I think you are definitely on the right track though, you're saving for a nice downpayment, and while the 'general consensus' may be to be hesitant to loan money to twenty-somethings, a bank is in the business of lending money; so if you have a good credit history, a decent down-payment and are buying a reasonable house for your income, they will give you a mortgage, even in these rocky times.
My husband and I are planning to relocate to Tucson, AZ. We would like to buy a house, except we're twenty-something and don't have much of a down payment (we're saving, though).
I think the general consensus is that the banks are a little shy of loaning to twenty-somethings without a down payment. So, I was thinking that perhaps my father could cosign for us.
He and his wife live in NY (on Long Island) and own a house on which they have two mortgages (one for the house, one for an addition and upgrades). I don't know much else about their credit history of debt because I've never asked. They have not-old cars, but I don't know if they make payments or own them outright. I know they both get paid decently (my dad owns a business, my step-mom has a steady, well-paying job), but that's about it.
What do you think? Would it work? Would it help? I don't want to ask them for money because I honestly feel they wouldn't have the cash to just send us, but they might be able to lend us some of their credit instead.
Does that make any sense? Is that how it works?
Not sure what you have saved up, but you only need 3.5% down for a FHA loan.
To answer your question, no that is not quite how it works. The down payment will have to come from somewhere whether there is a co-signer or not. A co-signer will only help if your debt to income ratios are too high to qualify for the loan.
I also agree with the other poster, that co-signing is a bad decision for your parents. It can ruin things for both you and them. You should work on saving up the 3.5% down. There should be lots of affordable housing in AZ right now with the over supply.
Also the cosigner would have to qualify along with the borrowers, and with two mortgages on thier primary, it's quite possible that they wouldn't make the DTI ratios when you add in the additional PITI.
I can't imagine why you would consider putting your parents in such a potentially bad position. If the bank won't loan you money it's because YOU CAN'T AFFORD TO BE A HOME OWNER, at least right now. Keep doing what you are doing, save up for a down payment, pay off any debt...CC, student loans, car payments (if you have any) to free up income to put towards a home. You're 20-something....no need to rush into things ill-prepared (which you are if the bank won't loan without a cosigner).
As a fellow, married twenty-something, we have had no problem obtaining a loan with a great interest rate. Before assuming that it would be dificult to get, maybe you should try getting pre-qualified with a bank and go from there. FHA loans require 3.5% down, which is peanuts. Better than a married daughter relying on her parents for anything monetary.
I can't imagine why you would consider putting your parents in such a potentially bad position. If the bank won't loan you money it's because YOU CAN'T AFFORD TO BE A HOME OWNER, at least right now. Keep doing what you are doing, save up for a down payment, pay off any debt...CC, student loans, car payments (if you have any) to free up income to put towards a home. You're 20-something....no need to rush into things ill-prepared (which you are if the bank won't loan without a cosigner).
I don't know if the bank won't loan to us, but thanks for assuming that we're idiots and have learned nothing at all from the national crisis. That's really nice of you.
For the record, we haven't attempted to get a loan yet, we're not stupid and we wouldn't EVER put ourselves or our family in that position unless we knew we could afford it if one of us got laid off.
Perhaps then, you should consult a bank for real information before you consult a message forum with hypothetical situations.
For your information, I was trying to be helpful. Believe it or not there are still plenty of idiots out there but I wasn't assuming you were one of them. My advice is still the same (with the exception of suggesting you actually go to the bank and see if you qualify for a loan before wondering if cosigning is an option), pay down debt and save a down payment. Good luck.
If you are relocating to a new area it is generally consider better practice to rent a place for some time so that
1) You find a neighborhood you like
2) You are sure you will want to live there for 5-7 years
3) You save up enough money for down payment and reserve (just in case)
If you are not sure about all 3 of the above, then I wouldnt buy right now. Its not like you are going to lose by waiting another year.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
