Home Buying in 94539>Question Details

Vijay Ekkala…, Home Buyer in 94089

I am a cosigner for a friends home loan, I will be buying a home do i qualify as first time buyer

Asked by Vijay Ekkaladevi, 94089 Mon Mar 23, 2009

Help the community by answering this question:

Answers

4
Hi Vijay, the key to understanding whether you qualify as a First Time Homebuyer is not clear based on the information provided. So, we need to go through a "guided discovery" process of sorts.

I’m not a lawyer nor am I a tax professional. So, any action you decide to take after reading the following should be reviewed by both of these professions before taking any action.

First, we need to clearly define what you really mean when using the term "Co-signer." There are various loan programs available today, and for our purposes I’m going to define these as FHA and Non-FHA. In the Non-FHA world there is no such thing as a defined “Co-signer”, there is only a Borrower and Co-borrowers. However, in the FHA world Co-signers are additionally defined. Here are the different distinctions:

Borrowers and Co-Borrowers take title to the property, are obligated on the mortgage note and must also sign the security instrument. The Borrower/Co-Borrower’s income, assets, liabilities, and credit history are considered in determining total creditworthiness of the transaction. On the other hand (just FHA world now), Co-signers do not hold ownership interest (title) in the property, but are liable for repaying the obligation and must sign all documents with the exception of the security instrument. The Co-signer's income, assets, liabilities, and credit history are considered in determining creditworthiness for the mortgage and the co-signer must complete and sign the loan application.

So, are you a Co-signer or Co-borrower?

Now let’s move on to the FTHB question. A "first-time home buyer" is defined as a buyer who has not owned a principal residence during the three-year period prior to the purchase.

If you were a Co-signer on a FHA loan, and you did not buy a personal residence over the last 3 years you are very likely a FTHB. In my opinion, a Co-signer is not a buyer because there is no transfer of title, and therefore, the three-year period test is a mute point.

On the other hand, if you were a Co-borrower on a Non-FHA loan, and it is still within the three-year window, you are likely NOT a FTHB. The only way that I am aware of where one can be a Co-borrower and treated as a FTHB is if the buyer can substantiate via records/tax returns they rented out their portion of the house. This is because ownership of a vacation home or rental property not used as a principal residence does not disqualify a buyer as a first-time homebuyer.

Best, Steve
0 votes Thank Flag Link Tue Apr 21, 2009
Hi Vijay, you have good questions and your questions would best be answered by a qualified Loan broker. If you do not have a loan & Financial adviser I have some very good people I can refer to you. Let me know if you would like a referral.....hope this helps, feel free to contact me if you have other questions or need a referral......Dawn 510-909-0373
0 votes Thank Flag Link Tue Mar 24, 2009
We recommend being in touch with a loan specialist for this information. There may be several issues that need to be unraveled before you can safely move forward.

Good luck
0 votes Thank Flag Link Tue Mar 24, 2009
Hello Vijay Ekkaladevi,

Some of the questions need to be answered before one can qualify you as a
first time home buyer.

When you co-signed for a friend’s home loan, did you sing it as a non-occupant co-borrower?

How does property title read?

How long ago did you co-sign it?

What kind of benefits you are looking for as a first time home buyers?
Tax credit of $7,500? Are you thinking of getting the FHA financing?

Good luck to you,

Charo Bhatt
510-381-2105
http://www.HomesByCharo.com
0 votes Thank Flag Link Mon Mar 23, 2009
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer