Buying house with parents...?

Question

What will be the best arrangement?
They have twice more money for downpayment but they are low income and probably will not qualify for large loan.

Answer 1

Are you all going to live in the house? If so, all three of you are going to be owners, and it would be a primary residence for everyone. This is probably your best option...unless one of you has bad credit. Then, the way the lender views the credit would matter. Most lenders will pull all 3 bureaus on each of you, line them up and use the lowest of the middle scores. But some lenders consider the first name on the application the primary borrower and others as co-borrowers. If this is the case, the primary borrower's credit is the one the decision is based on, and the co-borrowers are along for the ride -- UNLESS one of them has a big credit issue.

If the house is for you and they're helping you buy it, or the other way around, it will probably be considered investment property and the rate could be significantly higher. In that case, try to find a lender who will consider it a second home for the non-resident owner. That's a better rate.

Real estate law varies from state to state, and lenders adjust their policies accordingly. Call your bank and ask them what products and rates are available.

Answer 2

Home loans are now available to many people for whom they would have been out of the question just a few years ago. You’d be in much better shape to bargain for better interest rates if you had a more impressive credit history, but if the house you want is the deal youinterest rates, get bigger returns on the money loaned, and the borrowers get a homes in which to build equity, and chances to restore their credit records so that the first bad credit home loans they take will also be the last!

Answer 3

are all of you going to live together?? Be sure there is an agreement as to what will happen if someone decides to go a different way.

You might want to see a lawyer in your area, but I have set these up with joint ownership, both with and without survivorship. Everyone applies for the loan and everyone is liable for the full amount. If you go this route, you need to consider unexpected orders of events (child predeceases parent).

Also, consider puting the home in a "living trust" The best choice depends on the laws of your State.

Answer 4

are you goin to be living in the house?

either way you can qualify as a non-occupant co borrower....fha allows it.

if you put 20% down they wont verify income with 680+ credit scores