What are my chances to obtain a mortgage as a Primary or Co-Borrower with my Parents? (MASSACHUSETTS)

Asked by Dylan Mac, Framingham, MA Tue Jan 10, 2012

I am turning 23 soon. I have 3 years of great credit history. I graduated from college in 2010. I have held a part-time position (gross $200-300 weekly) since 12/2010 and have had my current position working as a medical assistant for 7 months (32 hr/wk; gross $500 weekly). My credit is ~720. I have no debt.

Although I live in Massachusetts, I am moving to Birmingham, AL. I am looking to take out a mortgage, ideally an FHA mortgage, for a 2BR condo $90K-$100K. I would like to be the primary on the loan, and my parents could potentially cosign. Possibly relevant info: My mother makes 30K/year and my dad is retired with very little investment income; however he has immaculate credit and has over 1 million in cash assets.

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, ,
Tue Jan 10, 2012
Yes you can do this, HOWEVER, you'll need to get "full" time employment once arriving there to qualify for a mortgage. Part time work must have a two year history for a lender to consider that income (otherwise it's looked at as temporary income). If you're staying with your company but relocating, the two year history with your company will have been met.

With a full time job and thirty days of pay stubs, a lender should be able to facilitate this for you. I've done many transactions like this in the past and it's always worked out. If you're a doctor and are just finishing school (medical is non-specific), you can get a loan as long as you have a certified employment offer and close within (usually) sixty days of your start date, otherwise the pay stubs would be required.

Your parents are acceptable non-occupying co-borrowers, the question is now, will you be able to be on the loan?

Most of my inlaws live in the Birmingham area, it's a nice area. The weather is certainly better than it is in Chicago. :)
Web Reference:  http://RobWeber.com
1 vote
Charita H Ca…, Agent, Gardendale, AL
Tue Jan 10, 2012
Your question is so very timely as I have just written a post about the very subject of using a co-borrower on a mortgage loan. I have provided a link and I think you'll find the article extremely helpful. I'd be very interested in hearing what you have to say after reading it.

The article is titled: Thinking About Buying a Home in Birmingham Alabama? Should You Ask Someone to Co-sign on a Mortgage Loan?
1 vote
Dylan Mac, Home Buyer, Framingham, MA
Fri Jan 13, 2012
Hi Charita,

On phone now so cannot email.

Let me try to narrow the criteria.

2-3br, minimum 2 bath, 1.5 mi and easy walk from UAB, respected/safe neighborhood that would be attractive to UAB med students. Night life in not important. Low maintenance condos and lofts. Bristol southside is good but seems overpriced. Oh, and FHA approved.
0 votes
Charita H Ca…, Agent, Gardendale, AL
Fri Jan 13, 2012
Dylan you asked about what kind a price range to expect within 2 - 3 miles from UAB. That is a very broad description that you're asking for and really impossible to truly address your question. The short answer would be a low of $5000 to a high of several hundred thousand.

When you get a chance can you email me specifically what you might be looking for. The radius that you are talking about is so diverse. You have condos, townhomes, historic homes, historic districts, lofts, downtown Birmingham and then there is UAB/Southside District. Then there's the question of how you want to be from nightlife (which could be right at your back door if you want).

There are just to many variable to really answer you question about price.
0 votes
Elliott R. O…, Agent, McLean, VA
Fri Jan 13, 2012
Here are some details on the FHA Non-Occupying Co-Borrower program:

FHA allows a non-occupying family member to co-sign for a borrower when they cannot qualify on their own due to income reasons. A co-signer cannot make up for bad credit; only the lack of credit and/or sufficient qualifying income.

There are many scenarios in which the program can help:

· Occupying borrower is a college student with limited verifiable income for qualifying purposes

· Occupying borrower works for cash income

· Occupying borrower has been self-employed for less than 24 months and thus has non-allowable income for qualifying purposes

· Occupying borrower recently made a complete change in employment field and has non-allowable income for qualifying purposes

· Occupying borrower has no credit and cannot provide non-traditional credit sources

· Occupying borrower recently received a large pay increase not consistent with earnings history rendering income non-allowable for qualifying purposes

· Occupying borrower is between jobs or assignments rendering qualifying income not usable

· Occupying borrower was recently discharged from military or is expected to be discharged from military in near future and has not secured civilian employment for qualifying income

· Occupying borrower is recently returning to the workforce after an extended leave of absence

Standard niece and loan limits apply for transactions including non-occupant co-borrowers when the subject property consists of one unit and when the non-occupant is related to the occupying borrower by blood, marriage or law. Additional family relationships will allow for maximum financing as well. For example, an uncle can co-sign for niece/nephew. When the non-occupying borrowers are not related by any of the situations described above, loan-to-value is limited to 75%.

All applicants are required to sign the note and mortgage and must be listed in title to the property regardless of occupancy. The non-occupying applicant must understand they are financially responsible for the mortgage so if they occupant does not make the payment and the loan defaults it will have a negative impact on both of their credit profiles.

FHA guidelines do not require qualifying of the occupying borrower but lenders are looking to see that they are capable or will be capable of making the payments themselves. The whole scenario has to make sense and it helps to have plenty of compensating factors like low DTI, plenty of reserves and steady income.

For more questions or details please contact me at your convenience.
0 votes
Dylan Mac, Home Buyer, Framingham, MA
Fri Jan 13, 2012
Thanks for all the responses. I plan to move/buy in Birmingham around May-June.

If someone could please tell me what should I expect to pay for a 2-3 bedroom (2 baths for 3BR) within 2 mile radius from UAB Med, it would be greatly appreciated!!
0 votes
Kay Ray, Agent, Birmingham, AL
Tue Jan 10, 2012
Your wish to have your parents co-sign is duable. The best thing for you however is to talk with a Mortgage Banker locally and he or she can tell you the necessary steps to make this work. There are a number of condos on the market that will fit your needs in that price range.
If you will contact me via email at kay@kayray.com I can give you the contact information for several lenders that will out you on the right track. You need to do this before you start the looking process so you will know exactly what you can qualify for. Good Luck. The rates are low and it is still a buyers market.
Look forward to talking with you.
Kay Ray
0 votes
, ,
Tue Jan 10, 2012
Hi Dylan,
FHA allows for a non-occupant co-borrower as your parents would be. In that situation, you would be the primary borrower. You would really just have to submit a Pre-Qualificaiton request to know exactly where you stand on your options.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | VA | USDA | GA Dream | Jumbo Financing
Web Reference:  http://www.rodneymason.com
0 votes
Charita H Ca…, Agent, Gardendale, AL
Tue Jan 10, 2012
By the way Dylan, when are you moving to Birmingham?
0 votes
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