Home Buying in Las Vegas>Question Details

Taylor, Home Buyer in Orange County, CA

Can my father co-sign a mortgage loan for me if I have absolutely no credit and don't even support myself?

Asked by Taylor, Orange County, CA Thu Jun 26, 2008

Here's the deal: I am a full time college student who does not work, and I am looking into purchasing an investment property in Las Vegas (even though its an odd area that usually doesn't appreciate well). Three of my friends are transferring to UNLV in either spring or fall, and are willing to sign a 2 year lease at a rent cost that assures that I do not lose money at all each month, with the strong possibility of long term lease afterward.

My question is, I would like my name to be on the title, but can my father (credit score around 800) co-sign a mortgage loan for me, and would I still get decent rates given my situation?

He is absolutely willing to do this if he believes it is a wise investment on my part, but is not sure of the specifics of it all.

What are my chances of being successful in the situation I have outlined for you?

Thank you very much.

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Answers

4
Hello Taylor-

First and foremost you have options. To specifically answer your question, yes you can be quitclaimed on the property, but only after it has closed in your father’s name. This is a common practice. But in-order to qualify for a non-owner occupied home (investment property), all borrowers would have to qualify for the mortgage. Hypothetically, if you take the same situation, but the property was going to be your primary residence there are loans that allow for a non-occupying co-borrower to help qualify for the loan. Please contact me for further details.

Thank you, and have a great day.

Patrick Moore
Senior Mortgage Banker
Prime Lending
Direct (702) 285-7774
0 votes Thank Flag Link Thu Jun 26, 2008
First I would suggest that your best option is to talk with a reputable lender. There are always fly by night outfits out there so be careful. Your best bet of finding a good lender is working with an agent you can trust.
Your father can purchase the property and once it is closed can add you to title. We did this with our college age student. You can set up an Limited Liability Corporation for the property and handle all the expenses from that fund. You would need to treat it like a business and not utilize those funds for anything else (check with your attorney on this plan. Many parents purchase homes for investments while their young people are in college and if your father have your name on title, he certainly can. One thing to keep in mind is that even if you remove his name from title, he will still be responsible for the mortgage until it is financed into your name. There are ways to handle this after you finish school without it costing your a lot of additional funds. Talk to your accountant or a good tax attorney to decide what is the best way to handle this. Remember if we are talking about just putting your name on the title, that is never a problem once the property is closed. I'm sure your father has good people that he talks to regarding business decisions. If you need help in finding property give me a call, I would be happy to help. Marilyn-702-348-7146
0 votes Thank Flag Link Thu Jun 26, 2008
Hi Taylor,

There is no way a lender will underwrite a loan for someone that is not on title of the property that is the leverage. Especially now in the days of Operation Malicious Mortgage or whatever other FBI sting operations are going on. I suppose it is possible for your father to quitclaim the deed over to you after the transaction is completed, but with most lender's Due On Sale clauses hanging over head, it is not necessarily the most comfortable situation you could be in.

It is possible to co-sign, but with no credit or income, it may very well be a situation where your Dad will take title and the loan as an investment property, then the both of you can work out some kind of deal on your own as to how the profit of the home is going to be split when you sell it down the road, and also how you would deal with any positive / negative cashflow of the property while you are leasing it, as well as the whole other host of things that go on with a rental property. Whatever arrangement you would come up with would strictly be between you and your father.

The biggest concern I have with your post is that you have "usually doesn't appreciate well" and "wise investment" in the same post. You can have either or, but not both. If I were you, I would go with the "wise investment." Always look at investments from a numbers perspective. I would strongly advise against an investment just because it might be a shorter drive to class for your buddies. Although, if you are looking at holding on to this property for the long term, 10+ years, and are just looking for a positive cashflow to be the bulk of your return, then go for it if rents in the area are getting what you would need to make it happen.

My investment philosophy, however, is to always get the best deal in the best location for optimum appreciation.

There are some strategies that we can discuss, and I can also get you in touch with a very good, qualified lender that will point you in the direction you need to go as far as if you should co-sign or not.

All the best,

Mike Dobranski, REALTOR®
Prudential Americana Group, REALTORS®
Las Vegas / Henderson, NV

702-370-3521
Mike@PrimeRealEstateLasVegas.com
http://www.PrimeRealEstateLasVegas.com
0 votes Thank Flag Link Thu Jun 26, 2008
Taylor,
You can have your name on title without being on the loan. If you could qualify with your dad as a co signer then you could be on the loan as well. First you would want to consult a good lender to evaluate your options. You may email me for a confidential number of a great lender.

Thank you and good luck
0 votes Thank Flag Link Thu Jun 26, 2008
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