Home Buying in Sandwich>Question Details

Army1, Home Buyer in Sandwich, MA

Does being a non-occupy co-borrower affect my first time home buyers benefits?

Asked by Army1, Sandwich, MA Tue Dec 6, 2011

I've never owned a home but am thinking about co-borrowing on a "refinance" what are the ramifications?

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As Andrew has suggested their are very few programs available for the first time home buyer. There are great lending programs available for ANY home buyer with as little as 3% down, some even offering 100% financing.

As everyone has suggested, think very carefully before cosigning for someone and understand the ramifications.
1-Your credit will be effected by the non-payment of the other party
2-If something should happen and the other party does not pay at all you are equally a 100% responsible for the balance
3- If you do try and purchase something else for yourself the payment that you have co-signed for will be factored as a 100% more drastically reducing your buying power in the future.
0 votes Thank Flag Link Thu Mar 15, 2012
I agree with Jim and Louis in regards to co-signing for someone being a bad idea.

However, most folks out there are under the impression there are all sorts of loan programs that are only available to 1st time home buyers and the reality is there are few, if any the borrowers actually qualify for.

Co-signing on a loan puts you on the hook. If they miss payments your credit is impacted. If you go to buy a home or get additional credit that debt is factored into your qualifying. I usually advise folks against co-signing for another. If the risk is too big for the bank to take, unless you are willing to help make the payment every month..you are probably not doing them the favor they think you are.
0 votes Thank Flag Link Wed Dec 7, 2011
If you are asking because of seeking a grant in the future, it very well may disqualify you if you are on the deed. Check the program. Deeper question, contrary to popular opinion underwriting guidelines are actually liberal, if a bank will not lend them money you should be careful co-signing. Their treatment of the co-signed loan will impact your credit report one way or another. If you co-sign you are assuming some of the risk usually taken by the lender, do you have more money than a bank?
0 votes Thank Flag Link Wed Dec 7, 2011

Bad idea. There are no benefits and infact huge potential problems. You can't deduct interest or taxes on a non owner owned home unless your considering the property an investment property. (speak to your accountant)

Also more importantly if your co-borrower is late on payments it WILL effect your credit. If they default you will be responsible for the entire debt.

If you are in a position and have a need for housing it is a great time to buy, much inventory, motivated sellers, and low rates. Control your own destiny.
0 votes Thank Flag Link Wed Dec 7, 2011
The first time home buyer credit has gone by the way so I'm not sure what you feel you might be missing. There is currently a guideline in place for the purchasing of most bank owned properties that you must occupy the property as your primary residence, but even this isn't effected by the "first time" home buyer status. That being said be sure to consult an attorney before jumping into whatever refinance co-borrower commitment you're planning to become part of. Cross all t's and dot all i's especially with the current state of several home owners in this housing market. As a prior Air Force member myself and by the look of your email name you can also check out this link for VA loans http://www.benefits.va.gov/homeloans/faqpreln.asp. Good Luck
0 votes Thank Flag Link Wed Dec 7, 2011
What benefits do you believe exist for 1st time buyers?
0 votes Thank Flag Link Tue Dec 6, 2011
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