Jaquitha called us today and wanted to know if her Aunt could help her buy a home in Rocky Mount. Jaquitha is recently graduated from college, and she has a stack of Student Loans, but most of them are in deferment.
She is in Grad School, and knows that when she finishes her MBA in December – she’s up for a raise. She read about a mortgage that allowed for a non-occupying Borrower, and she thought buying a home with her Aunt might be a good option.
She is just 6 months into her first job, and she’s doing well, she is managing her debt and has good credit scores – and as she finishes up with college, she’s tired of living in Apartments. She qualifies for a home, but not one she feels like she would stay in for very long, so she talked to her Aunt about helping her out.
It’s a good plan. FHA allows family members to act as a Non-Occupying Borrower, and their income and credit can help in qualifying the borrower for a slightly larger house. The down payment for a FHA Home Loan is only 3.5%, and they allow for the entire down payment to be a gift.
Other mortgage programs, like USDA Home Loans and Conventional loans do not offer the non-owner occupying co-borrower situation. Jaquitha is single, and a first time home buyer. But, if she was married, she could also put her Aunt on the loan – with or without her husband. We see non-owner borrowers as really helpful for folks who are buying a home as a single parent -and we use the program very often for folks who have a situation where a spouse has good income but lousy credit.
We’ve done a fair number of FHA Non-Occupying Borrower loans for parents who have children in Graduate School. If you are in Grad School, like Jaquitha – it’s tough to study and do research with neighbors banging around all night! We’ve done loans for parents with students at Central and NC State this summer who wanted to buy a place for the student to live. With mortgage rates so low – it’s often cheaper than renting! The student does NOT have to draw income, but they DO need a credit score.
Jaquitha will earn more, and wants to buy a bigger home. But again, often times we are talking to folks who want to know how to get their credit scores up just a little bit more so that they can buy a house. If you are in THAT situation, this site has a ton of information about the Minimum Credit Scores needed to buy a house.
Another thing you might want to check out, if you are in a new job – and believe that you will be getting raises in the next couple of years is a 2-1 Buydown. I think this is the program we are going to use with Jaquitha and her Aunt 🙂
If you are looking for a home, want to know where to start – or have questions about FHA and Non-Occupying Borrower programs – call Steve and Eleanor Thorne 919 649 5058 / or leave us a comment below! I try to answer all of your questions as quickly as possible. You can also find us on Facebook and Google +
(by the way – our client’s name is not really Jaquitha – I just thought that was a pretty name)