I need my son's income on a loan application along with my income so that I qualify for a home loan. Though I receive money from my partner, it is not court mandated nor have I deposited it in the bank to show proof of such. My son would like to buy his own home in the future. Would he be able to do so? even though money is still owed on the one he helped my with? And if so, what needs to be done to make it happen?
2007-06-14 14:43:37 · 17 answers · asked by gcruzbx 1 in Business & Finance ➔ Renting & Real Estate
Having debt for the mortgage for your home could affect his ability to get a mortgage for his own home. If his credit is good, and all payments are current, he could very possibly still get one.
2007-06-14 14:46:58 · answer #1 · answered by Judy 7 · 0⤊ 0⤋
I'm a mortgage banker. I'm going to be frank with you. Avoid doing this to your son-if possible. Your debt will cause his debt to income ratio to rise and possibly, depending on his income, interfere with his ability to secure credit on other investments. Unless he is wealthy, I'm assuming that he is not, otherwise this question wouldn't be an issue.
Can't you qualify for a less expensive home on your own? Maybe a condo? Mobile home? Do it on your own, if possible. Please.
As a very, very last resort. Maybe he can get a 2 unit. You live in one side, he the other. Or maybe he rents the other side out. If he lives in the other side, you must promise on your best shoes to be nice to is wife and not interfere -ever. Unless somebody is being physically abused or the like.
I would try for the condo. But another thing to consider is that if you don't have the income, how will you make the monthly mortgage payments even if he does buy you a home? A two unit might be the way to go in this case -nobody wants to see mom homeless but at least with a 2 unit, he may be able to use it to generate income in case you can't or will not help him pay the mortgage.
Good luck.
2007-06-14 14:57:08 · answer #2 · answered by coolbreeze44105 2 · 1⤊ 0⤋
He's going to have a mortgage in his name if he signs the note. As long as you keep him on the loan, he's obligated to pay the entire thing in the eyes of every lender in America.. :) He should declare the purchase as a second home, not his primary residence, to at least free him up in the future to get a better loan for a primary home.
He can certainly get another mortgage for a primary residence if his income ratio is high enough. For example, if this mortgage is $500, and he makes $5000 a month, his debt load is 10%. If he has no other debt, (car, credit card, whatever) most lenders would let him get another mortgage up to 30% of his monthly income, or a payment of $1000.
If he's not making that much money, then this payment would be it until you would have to get the loan low enough that a lender would re-finance it in your name only.
Start depositing your money from your partner, there's no reason to hide that and make your debt ratio look too high.
2007-06-14 14:51:07 · answer #3 · answered by Anonymous · 1⤊ 0⤋
You can add him to the loan and get a possible approval. But, it will reflect on his debt to income ratio for any loans he will apply for in the future. If his income is strong and it doesn't impact his debt negatively he might be able to get a new loan on his own depending on his credit, purchase price and other factors. The lenders might require a down payment for his purchase. It all depends. On the positive side, his involvement in your loan could enhance his credit if all the payments are current. When you sell or refinance you will release him of his commitment to your loan. Owning a couple of properties can do allot of good for your credit. Too many properties or to much debt can be a problem.
2007-06-14 15:23:06 · answer #4 · answered by Vin 2 · 0⤊ 0⤋
I'm sure your son loves you, but usually it's the other way around.
I suggest getting a small house where you don't need anything from anyone.
This will effect his ability to get his own house, unless he anticipates that when he is ready, that his income has increase dramatically.
Banks look at income to debt ratio and if he's lists on other homes, That's his debt also, even if your paying for it.
I suggest getting a small house. or better yet buy a slightly bigger house where you can share. A duplex.
2007-06-14 14:53:15 · answer #5 · answered by AE N 5 · 1⤊ 0⤋
Co-signing is the equivilant to debt for him. If the payments are timely and equity is built up in the home and of course his income can cover both loans it wont be a huge issue.
2007-06-14 14:47:47 · answer #6 · answered by AnswerKing 1 · 1⤊ 0⤋
I'd ask a financial specialist, BUT...if your son co-signs for a loan in your name, they will count that as his debt (even if the payments are perfect) and it may over extend his credit...(debt to income ratio) which would make it difficult for him to buy a house.
2007-06-14 14:46:34 · answer #7 · answered by Lisa E 6 · 0⤊ 0⤋
if his name is on the loan then when he applies for another loan they will have to take into consideration the money owed... even if he is not paying the loan the bank or mortgage lender doesnt see it that way...here are some good home buying tips so maybe it can help you find the answers you are looking for
http://www.michellecphillipshomes.com/PageManager/default.aspx/PageID=1988332
2007-06-14 15:18:39 · answer #8 · answered by Pure Genius 3 · 0⤊ 0⤋
Your son would only be able to get a mortgage for his own house if his finances are such that on paper it looks like he can afford both.
2007-06-14 14:47:41 · answer #9 · answered by Tor 4 · 1⤊ 0⤋
He will be a co-signer on the loan. This will be reflected in his credit scores and show as monthly debt when determining his debt-income ratio.
2007-06-14 14:47:28 · answer #10 · answered by Anonymous · 1⤊ 0⤋