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That "something" you are signing means you are liable for the mortgage payments - yes, all of them - if he can't or won't pay at any point. The limit on what the bank will lend him based on his salary is there for a reason - they don't expect him to be able to keep up repayments if they lend him more (or more precisely, there's a big risk that he won't). ...


174

What are the risks, if any The risks are exemplified by the outcomes presented on this website, including: What can I do when the co-signer hasn't paid anything on the house in 7 years and now they want money? How do I get myself out this disastrous situation What can I do as a co-signer? I signed on as the co-signer on a car loan and somehow ended up ...


51

Wrong way round. Transitional arrangements are non-binding guidelines that the lenders can observe if they choose to. The borrower - like your friend - doesn't get to choose whether to use them or not. Your friend obviously can't afford the property, so if you do this, all I can say is congratulations on buying your new house, and I hope you got a deal on ...


37

You should only loan money to friends or relatives if you are fully accepting the possibility of never ever getting that money back. And in this situation it can happen that you will be forced to give him a very large loan if something bad ever happens to him. (Paying the monthly rates instead of him and expecting he will someday pay it back to you is ...


30

Has she talked to a banker? That would be a great place to start. Please understand that this is a hot mess in the making and as her friend, you should help her navigate through it. It is better that either she, on her own, or he on his own, buy the property. It should be communicated that the party not buying the home will have no financial interest in ...


23

It is important to differentiate between corporate and governmental policies. It is unlikely that the governmental policies are that draconian. However, it is plausible that corporate policies are exactly that. If customer A does not meet these guidelines, then the answer is "No". There is another possibility, if you have already been turned down. ...


15

In my opinion you don't need to do much if anything differently. Keep on top of your payments and your credit score will improve over time (but is already quite good). If your cards have relatively low limits and are therefore frequently utilized highly, then it could be worth asking for increased limits to help keep your utilization down. Beyond that I ...


14

Something else to consider, even if your friend is on the up and up and never misses a payment: Until the house is paid off, any time you apply for credit banks will count the mortgage payment on your friends house against your ability to pay all your existing debts in addition to whatever new loan you're applying for. If you're renting a home now, this ...


11

In a perfect world, I'd look at the facts, and say that you were gifted 3 weeks interest by your mom. A bit less than $500, with no consequences. Your broker should lose his license. He counseled you (or your mother) to make a fraudulent statement. A true gift would require a Form 709 to declare the gift, and use up part of the lifetime transfer amount, ...


11

If you have good credit, most banks should be comfortable giving you a loan that you can clearly afford for only 10% down. If you put less than 20% down, you'll almost certainly have to pay for PMI (Private Mortgage Insurance). This will be rolled into your regularly monthly payments. Once you've paid enough of your mortgage off that you have 20% equity, ...


10

It depends on the terms of the mortgage. Generally speaking, residential mortgages specifically prohibit letting out a property without the bank's express permission -- but as you say, that tends to assume that the whole property is being let, not just a part of it. Conversely, buy-to-let mortgages generally prohibit living in the property yourself! The ...


10

Short answer: don't do it. Unless you know something that the bank doesn't, it's safe to assume that banks are a lot better at assessing risk than you are. If they think he can't afford it, odds are he can't afford it regardless of what he might say to the contrary. In this case, the best answer may be "sorry for your luck;" you could recommend that he comes ...


10

Both of you sit down with a lawyer who practices in real estate and foreclosures, and hash out every single possibility of what could conceivably go wrong, with nothing out of bounds. Come up with a reasonable and fair plan for resolving each situation, that you are willing to commit to, life and breath, for real, no exit. Put all of it into a legal ...


10

...my friend says they were told they'd have been approved if "I had a third line of credit at least a year old." This is called a "Tradeline Overlay". There are a normal set of rules that must be met for approval of all mortgages such as minimum credit score (typically 560-620 ish) and debt to income ratio (for example 45% or lower). Some lenders add an ...


10

What should I do, in regards to filing taxes, to maximize my ability to get a mortgage? I would suggest that you not try to maximize your ability to get a mortgage and certainly not try to pay more taxes to overstate your income. Mortgage lending is already set up to allow one to borrow far more than is usually a good idea to borrow. The lender’s goal ...


9

Yes you will need an emergency fund for the rental. Besides appliances, or a roof, that might need to be replaced, you will also have to protect against being unable to rent the unit. Another risk is that you may have a tenant damage the unit. While you can get the money through the courts it may take months or longer. You can't wait for the money before ...


8

Banks worry that the large gift might be a loan that is ultimately expected to be repaid. If so, that affects the cash flow of the recipient, and makes it more difficult to make the mortgage payments to the bank. In some cases, of course, it is an informal loan: Dad advances a large $X to son to use as a downpayent, but does not charge interest and the ...


8

If you have excellent credit, you will get the advertised rate. I don't know if a lender would go below the advertised rate. Lenders advertise the best rate they can offer.


8

Banks are obligated to assess your financial viability (multiple properties, even without mortgages are a large financial burden). Usually when people begin to collect multiple properties for the purposes of renting them out, they will form an LLC or other corporate entity to protect their assets. It is also very unusual for a landlord who owns multiple ...


8

I'm going to answer this as if you'd asked about using a generic local lender versus a generic big bank; I think that's on topic. I would advise a local lender, or at least a lender that has a local presence (an office you can walk into with the loan officer that is handling your mortgage being physically there). Mortgages are complicated processes, and ...


8

Your post has some assumptions that are not, or may not be true. For one the assumption is that you have to wait 7 years after you settle your debts to buy a home. That is not the case. For some people (me included) settling an charged off debt was part of my mortgage application process. It was a small debt that a doctor's office claimed I owed, but I ...


7

A few things you might run into: Keep an eye on the roof and plan accordingly. It is always a good idea to plan for at least a 10% vacancy rate. ie. one month per year per unit. General maintenance, upkeep (yard maintenance, painting, leave raking, etc). Destructive tenants (Be sure to take your time screening potential tenants to avoid this). Keep an eye ...


7

I'd need to have a mortgage agreed before going to look at houses Wrong. You can look at houses without a mortgage in principle, but you would be at a disadvantage to people who do have one. Mortgage in Principle they said they can only do a phone interview That is plausible because they have your financial information with them, so you don't need to ...


7

Is a $250-275k mortgage realistic with a monthly gross income of $11400 and monthly expenditures around $2200-2500 (mostly for student loans)? Can't really answer the question unless you provide a net income. My concern is that you seem to have a more than adequate household income, however your have only saved $15k. If a third of your income is going ...


7

Your cousin should be able to obtain a loan on favorable terms. The actual legal document that will be signed by your cousin's sibling is a quit claim deed. This is basically a form assigning sole ownership to your cousin. On that form they can usually list a dollar amount exchanged for quitting claim. But yes, this is essentially a case of two owners having ...


7

Pete B. has provided a practical answer. I'm answering separately to address an interesting point you brought up: (Alternatively ... is this all bound by regulation now, so that the concept is legally impossible now?) In the strictest "regulatory" sense, in most countries, there are basic banking regulations that strongly deter making loans to people who ...


6

In the United States, the Fair Housing Act and the Americans with Disabilities Act (ADA) prohibit discrimination based on health problems. It doesn't matter how old you are or what health problems you have. Realistically, if you die, most likely the mortgage lender will be paid in full from the sale of the home or other assets or they get the house. ...


6

Unfortunately you answered your own question: Now my house is essentially unsellable unless I can find someone to buy it cash or someone who is willing to find a portfolio lender, which will require them to put down 10% plus pay a higher rate. Getting lawyers involved will cost you time and money and get little results because the offending owner(s) ...


6

On $4K/mo gross about $1000/mo can go to the mortgage, and at today's rates, that's about $200K of mortgage the bank might lend you. Income is qualified based on gross, not net, so if $48,000/yr is wrong, please scale my guesstimate down a bit. In the end, today's rates allow a mortgage of nearly 4X one's gross income. This is too high, in my opinion. I'm ...


6

This is not a full answer and I have no personal finance experience. But I have a personal story as I did this. As Vicky stated Another point: there are various schemes available to help first time buyers. By signing up for this, you would exclude yourself from any of those schemes in the future. I did this for my dad when I was 16 or so. I am in ...


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