Home Buying in Hazel Park>Question Details

Dan, Home Buyer in Hazel Park, MI

my daughter is looking for house. three yrs ago she bought this one that I'm her dad and mom live in . she signed paper over to me giving me the

Asked by Dan, Hazel Park, MI Wed Jul 13, 2011

house but never turned it in . I have always made all payments on it since she bought it. my wife and my credit were bad at the time. her credit score eright now is 620 house we saw is about 17,000 now can she get aloan for that house by say putting down 4,000

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Hi Dan,

It sounds like she was trying to sign Title over to you but never had it recorded - if that is the case, she still owns the house. However, even if she records the transfer of Title, she will still be liable for the loan (I'm assuming there is one since you referred to making the payments). If she wants to purchase another home, she will need to be able to qualify for a loan (unless she's going to pay all cash). When she applies for the loan, they will take into account she already has a loan (or loans) for the house you're living in. If she doesn't qualify for both loans, she will not be able to purchase another home.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
2 votes Thank Flag Link Wed Jul 13, 2011
Hi Dan
Regardless of who's name the title is in, since the mortgage is in her name she alone is responsible for it. To qualify for a new mortgage she must personally have the capability to afford the current payment (including taxes and insurance) AND the new payment.

Shane makes a good point though - I doubt you'll find a bank willing to give a mortgage that small. From a lender perspective, it's just as much if not more work to close a $17,000 loan as it is a $217,000 and the costs of doing this loan outweigh any interest and fees they could make on doing this loan.

I'm not trying to discourage you from pursuing things. By all means check with a lender or two. But you're probably looking at having to pay cash as opposed to financing in this situation.

Best of luck!
1 vote Thank Flag Link Thu Jul 14, 2011
Not enough information but sounds like a mess. If your daughter bought the house for you claiming that she was buying it for herself to live in that is a very bad move by all involved. That is what your question implies. Acting as a straw buyer is fraud and all of the parties involved could be in trouble so be careful. If the loan on your house is a standard mortgage form it probably contains a due on sale clause if there is any change to the title. If she signed the title over to you the mortgage could be called due. If you are making payments directly to the bank that holds the mortgage and doing so by check (in your name) it helps your cause. If you are playing games with the payments, making them in cash or paying to the daughter to make them it makes you look guiltier because it implies you know better. Anytime you hide something from a lender you play with fire so be careful. If you and your wife now qualify for a loan a good move might be to buy the home and arrange your own financing. Seek legal counsel before making a move if my description above is close to the truth.
1 vote Thank Flag Link Wed Jul 13, 2011
Yes , you can obtain a loan easily with that type of down payment and credit score due to the fact its acceptable credit, just watch out for A.P.R ratings, they can become a high rise when trying to pay back home loans. it seems as if you will have to get the deed registered first before attempting any future procedures of home ownership.
0 votes Thank Flag Link Fri May 11, 2012
Assuming all is good in Dan's world regarding this transaction between him, his wife & his daughter... skip ahead to the purchase of a $17,000 home with a $4,000 down payment, leaving $13,000 to be financed.

That is too small of a loan amount for every lender I know of as the amount of APR affecting fees that'd be required to be charged would make the loan illegal to make (7.99% of $13,000 is $1,038.70, which is all of the APR affecting fees can total - Michigan's state limit may even be less).

Your best bet would be to get a personal loan, perhaps you, your wife and your daughter can all take out personal loans that accumulate $13,000, and then with the $4,000 down payment, you could purchase the new home in cash (perhaps even get a better deal than $17k).
0 votes Thank Flag Link Wed Jul 13, 2011
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