Home Buying in Irvine>Question Details

Thaoh, Home Buyer in Irvine, CA

Buying a condo in IRVINE California from oversea fund or cosigner? (student, no credit and working background, etc...)

Asked by Thaoh, Irvine, CA Wed Sep 14, 2011

A brief background: graduate student, permanent resident, been studying my whole time here and has no credit history (has not applied to any credit card during my time here), FICO score 670. I am about to graduate by the end of this year and would like to buy a condo in Irvine. But it seems like iam not qualified for this, so I am thinking of either my father will help me buy it as a foreigner (40%-50% down-payment) or my cousin will cosign the loan for me. I have two questions would like to ask for your advice:
1. If I get my cousin cosigned, what would be the normal requirements (credit score, income, relationship proof, etc,,,) for him? Can he help me cosign the loan?
2. If my father from oversea wants to help me buy it, down 40%-60%, where can we loan the rest? Any recommended banks? What rate range it normally falls in?
I heard if foreigners buying houses in the US, the loan rate would be around 10%-12% compared to 3%-5% of a normal US citizen. Is it true? Plz help....

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First, if you have a 670 credit score, that means you have credit. A credit score is generated when:

• At least one account that has been open for six months or more
• At least one undisputed account that has been reported to the credit bureau with in the past six months
• No indication of deceased on the credit report

So even though you don't have a credit card, you may have other forms of credit and that is why your score is reporting - perhaps student loans?

When you said "graduate by the end of this year", did you mean in 4 months from now (end of 2011) or end of the school year as in 2012 (May/June'ish?) - if you are graduating and will be getting a job related to your field of study/your degree in school, then your new job and it's income will likely be able to qualify for a mortgage. If it's 4 months from now, I don't think home prices are going up between now and then, and even by next May, where there will be a lot more buyers than in December, I don't see home prices going up in that time span either (personally I'd be surprised if we see steady home price appreciation in the next 2 years). Is there an immediate need to buy right now?

If your cousin co-signs for the mortgage, because you cannot qualify for it with your own employment/income, then theoretically you could purchase the home with FHA financing (3.5% minimum down payment) or with conforming financing (20% minimum down payment) - and in either situation your cousin's income can be the sole qualifying income. In either situation you could *also* get the down payment from your father who is overseas - so you could get help in both ways. Your cousin's income would need to qualify for not only the new mortgage payment, but also all of your debts (if you have any), as well as your cousin's own debts (his housing payment, his personal debts)... so your cousin's income may have to be pretty high in order to do that. For proof you may have to printout a family ancestry tree/connect the dots on how you are cousin's, etc., it's really not that elaborate.

Credit requirements for FHA financing with most lenders is a 620 or 640, and if you choose conforming financing with 20% down then a 620 score is the minimum with every lender who offers it (which is ~99% of all mortgage lenders) - but with conforming mortgages you'll want to aim for higher scores as it is more credit-sensitive than FHA financing.

If your father wants to help you buy it by being on the loan, then you are correct he'd have to get something called "foreign national financing" and the down payment requirements are about what you plan on putting down (40% down is typical) - however the interest rates are *not* 10-12%, they also aren't 4%, they are more in the 5-7% range. Your father may want to start out looking in his own country for banks who will lend on U.S. real estate, particularly banks that also have U.S. branches, but there are also several banks here in SoCal who will lend to foreign nationals as well (true foreign nationals, without Visa's, etc.).

For ease of qualifying, it'd probably go in order of:

1. You graduating & using your new employment and it's income to qualify
2. Your cousin co-signing with you on the mortgage
3. Your father qualifying for the mortgage

If you'd like help with any of them I'd be happy to.
0 votes Thank Flag Link Wed Sep 14, 2011
Thaoh,

There are other ways to buy a condo in this market without getting a formal loan from a third party like a bank. I can explain creative ways for you to buy a condo on your own without your family's help if you would give me a call. I'm both an Orange County real estate broker and a California lawyer so I can make sure you are fully protected and get the right advice. My number is 949.878.8557.

Thank you,

Scott Hayward
0 votes Thank Flag Link Wed Sep 14, 2011
Hi thaoh

I have a lender that can help first time buyers. Also has some grant monies to help with down payments. Paid back or not paid back. Call him
Mr Babak. 949-378-0829.
Ask him about I'd you need a cosigner or not. Please call me or email me once you have talke with him
Mr Babak has many types of loans and would need to get all the information from you on how to help you and which of the options you want to do.
I don't get back to this trulia thread
Thank you and talk to you soon
Ingrid Ski Realtor
949-874-0432
IngridSki2@yahoo.com
0 votes Thank Flag Link Wed Sep 14, 2011
I suggest not having your cousin co-sign. This may cause conflicts later. If he does, he should do this with both eyes wide open. The mortgage payment will count against his DTI. If you don't meet your obligation he will be responsible for the loan.

The best way is to wait until you are employed upon graduating and have your parents "Gift" you the 40% that you think you'll need.

Happy funding, Rudi
Web Reference: http://www.umboc.com
0 votes Thank Flag Link Wed Sep 14, 2011
The answer to your first question is yes, your cousin may help you qualify. In addition to good credit, stable income and relationship, other factors come in to play such as if your cousin already has another mortgage, other revolving credit accounts he may have...
Your father may help you and you still may get a good interest rate.
We'll be happy to put in contact with a qualified local loan agent as it is imperative you get fully pre-approved for your loan before you start looking at homes.
Best luck in your home hunting efforts.
0 votes Thank Flag Link Wed Sep 14, 2011
There's a lot of misinformation going around about this. Your father could help you to buy the condo, and could obtain financing provided he qualifies. Your cousin also could cosign for you. You also have other options.

The rate/terms that your father would receive will depend on several factors. He should shop around for the best rate/terms.
0 votes Thank Flag Link Wed Sep 14, 2011
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