Tag Archives: non occupying co borrower

Single Parent Programs to Buy A Home in NC

With the Economy in a “slump” statistics show more and more families have a single parent.  Great news!  There are lots of opportunities and  Single Parent Programs to Buy A Home in North Carolina! If you are in this situation, and want to purchase a home, there are some very specific details you should know:

  • FHA requires a 3.5% Investment into the Property, which is lower than the 5% charged on most Conventional Loans.
  • The down payment for a FHA loan can be a gift (here’s more information on Down Payment Options with FHA)
  • We can also check and see if you qualify for up 3% in the form of a GRANT for down payment or closing costs from NC Housing Finance Agency!  You do not have to be a first time home buyer to qualify for this program – you just can’t own a home at the time of closing!
  • If you ARE a first time home buyer – you might qualify for the Mortgage Tax Credit we offer (not all banks offer these perks).  It can save you up to $2000 a year in taxes, and you don’t have to qualify for the program each year.  It’s yours. So if you live in the house for 7 years, the Mortgage Tax Credit could save you $14,000!

Kiddie Condos are Not Just for Kiddies!

Kiddie Condos & FHA LoansFHA Home Loans have a provision that allows family members to more easily help each other out in the home buying process.  They allow family to provide gifts for down payment, closing costs and to pay debt off in order to qualify for the new home.

FHA Home Loans also have a way for family members to actually go on the mortgage loan, lending their established credit and work history – this is commonly referred to as a “kiddie condo.”  It doesn’t mean that the person living in the house has to be a “kid” – nor does the property have to be a “condo” – it’s just an old FHA Loan “Industry” slang term. Continue reading Kiddie Condos are Not Just for Kiddies!

One Borrower Has Income One Borrower Has Credit Score

buy_a_home_in_Apex_NCWhen one borrower has most of the income… the other borrower has good credit scores… there ARE options for purchasing a home. Look at the question we had yesterday:

“We want to purchase a home, and I want to know if we can get it.  My husband currently has a mid credit score of 538,  and mine is 678.   He makes about 52,000 and I make 25,000.  I’m still in graduate school full-time.  We saved  $4,000 for closing cost so far.  We want the house by the end of October 2014 Can we get a loan?”

There are multiple ways to make this work – here’s Option 1:

Purchase a home using FHA, and have a non-owner occupied co-borrower on the loan with the borrower who has good credit scores. If you know that you can make the payments on your own, then having a parent, or other family member, on the loan will not be a burden to them.  After you’ve made 12 months of payments (and by all account mortgage interest rates will still be low a year from now) you can refinance the loan and take the family member(s) off.

This is a GREAT program because the home still only requires a 3.5% down payment, and it is NOT considered investment property, so you can still write off the taxes and mortgage interest.

Continue reading One Borrower Has Income One Borrower Has Credit Score

FHA Underwriting Guidelines for NC

We talk to people everyday who have questions about qualifying for a FHA Mortgage Loan in NC.  FHA Underwriting Guidelines, are actually pretty straightforward. 

Unlike qualifying for a VA Mortgage loan (where you must be a qualifying Veteran) or a USDA Home Loan (that requires that you meet income limits for your county and the property must fit within the USDA RD Loan Footprint) – FHA has far fewer restrictions!  They do have Maximum Loan Amounts, which vary per county – but other than that, just about anyone who wants to purchase an Owner Occupied Home can do so!

  • Maximum Loan Amounts:  Maximum FHA Loan Limits Vary per County, and are subject to change each October.  View Current FHA Loan Limits for all Counties in North Carolina.  The FHA Maximum Loan limit for Wake County in 2013 is $295,000 –  It will move lower on 1/1/2014.  For the past 5 years FHA has lowered the maximum loan limits for several NC Counties (including Wake County)- and then, 3 months later, raised the limit back to the “original” 2009 limit.  According to recent adjustments, the Wake County Limit, for instance, will go to $280600.
  • FHA Qualifying Income Requirements: FHA is flexible with income used to qualify buyers.  They will work with people who are in the IT field, and are on contracts, they will count part time income, and Child support and Alimony Payments.  For the most part it’s also important to remember that when starting a new job, you will probably need to receive your first full paycheck before you can close on your new home. Continue reading FHA Underwriting Guidelines for NC

Changing Jobs Before You Buy A House

In the last few days I’ll bet we’ve talked to 4 people who say that they are considering a job change, and want to know what that’s going to do to their pre qualification to buy a home.  Changing jobs before you buy a house is definitely better (in my opinion) than doing it DURING the mortgage process – however there are some factors you need to consider.

Are you going to stay in the same line of work?  Are you going to be working under a different type of income plan – like Commissions?  Are you considering going to work as a Contract Employee, or become otherwise self employed?

And most importantly… will there be a probationary period after you are hired??? 

Here’s a question from a recent college grad, who is in the “market” to buy a house:

“I have a job interview tomorrow and I have a good feeling that I could land a full time job. If I get the salary I think I will get, I think I could afford a $165,000 or less house. I was wondering how long I have to have the job before I can get a loan? I have good credit, I always pay in full and on time, and I graduated from college last year. I read online that you can get a loan with 3.5% down. I think I could get this either from my current credit cards or live with my parents for a few months and save that amount. So how long do I need a job for? A year? I would really like to get a house before Christmas –  if i could. I am 23 if that matters at all.”

First Time Home Buyers, especially recent college grads who want to buy a house, have several options in this situation.  There are no hard and fast rules as to the length of employment with an FHA insured loan.  Ditto for USDA Loans, which require no down payments.  The income must be stable, and we need to expect it to continue.  In the case of trying to rely on stipends, alimony, child support, apprenticeships or winnings (from the lottery for instance) we must show that the income is for a period of at least 3 years after closing. Continue reading Changing Jobs Before You Buy A House

FHA and Non-Occupying Co-Signors

FHA has a unique qualification / underwriting guideline, that allows you to purchase a home, with a relative that does not live in the house… “The FHA Non-Occupying Co-Signor Program”  is sometimes, referred to in the Mortgage Industry as a “Kiddie Condo,”  because frankly it’s perfect for purchasing a house for kids in college!

FHA and Non-Occupying Co-SignorsInstead of renting a dorm, many NC parents put the student on the mortgage loan and purchase a house, splitting the rent with others!  We also use this program for 55+ adults who having aging parents who can not, for whatever reason, qualify to purchase a home – and the child helps the parent qualify for a mortgage loan.

Quite often First Time Homebuyers have a need for someone else to be on a mortgage with them in order to qualify to purchase a home.   Additionally, we see situations where one spouse has a credit issue, and while the other spouse has great credit scores (maybe one had a foreclosure or short sale), they can’t qualify for the new house on their single income.  In each of these cases, we refer clients to the FHA mortgage loan program, because of it’s common sense underwriting approach. Continue reading FHA and Non-Occupying Co-Signors