The Michael Group
Hope this helps. Please call or email me if you have any questions.
Don Groff | REALTORÂ® & Mortgage Broker
Austin Real Estate Pros & 360 Lending Group
o 512.669.5599 | m 512.633.4157 | email@example.com
websites: http://www.AustinListed.com | http://www.360LendingGroup.com
Jim's answer was great, but let me elaborate on it a little.
You can definitely buy your parents a home, It is not required that you live there. However, if you are not living in the home with them than the rules for financing are a little bit different. The home would be considered an investment property. You will probably need to provide a larger down payment (20% or more) and the interest rate will likely be a little higher than for an owner occupied home - probably in the ball park of 1/2% higher.
An alternative to this would be if your parents have good enough credit to qualify for a mortgage, but they are just short on being able to qualify themselves. FHA permits a relative to act as a "non-occupying co-borrower". A non-occupying co-borrower is a credit applicant who:
â€¢ does not occupy the subject property as a principal residence;
â€¢ may or may not have an ownership interest in the subject property as indicated on the title;
â€¢ signs the mortgage or deed of trust note;
â€¢ has joint liability for the note with the borrower(s); and
â€¢ does not have an interest in the property sales transaction, such as the property seller, the builder,
or the real estate broker
Basically, you would be responsible for the loan equally with your parents, and the lender could consider YOUR income, debts, and assets towards qualifying.
Feel free to call me. I will help as best I can to sort out your options.
Tony Grech | Mortgage Loan Originator | NMLS #977416
PMAC Lending Services, Inc.
Toll-free (855) 642-4762 ext. 278
Mobile (313) 622-7383
Fax (248) 945-4842
1. Pay cash
2. Finance with a non-owner occupied mortgage loan
3. Parents carry back the loan
Donâ€™t play games with #2, one of the frequent questions I am asked is how to get an owner occupied loan for a non-owner occupied property, you donâ€™t. It is a serious crime to misrepresent anything in the mortgage process.
On #3, if your parents do not have a mortgage on the home and all you are trying to do is help their cash flow, this could be good. If they have a mortgage any change in title could trigger the due-on-sale clause in their mortgage agreement so be careful. Good luck,
NMLS # 6395
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.