After years of getting help from mom and dad, some adult children are returning the favor and buying their parents a house.
Not all lenders will allow adult children to co-sign for their parents on jumbo loans-those that exceed $417,000 in most areas and $625,500 in some high-priced places, says John Walsh, CEO of Milford, Conn.-based Total Mortgage. However, enough lenders allow it that most children who want to help home-buying parents, whether working or retired, should be able to co-borrow, Mr. Walsh says.
Deciding what to do with the house can be a major quandary for couples getting a divorce, particularly when they share a mortgage.
At LDSAgents.com, a qualified mortgage professional can work with you during the settlement process and can help identify many of the hurdles.
Cynthia Thompson, the founder of Divorce Planning Solutions, a financial planning firm in White Plains, N.Y., says ideally, this preparation should happen early on in the divorce process . Too often, Ms. Thompson said, people are “arguing, litigating, fighting, having no idea of the whole picture.”
When there is equity in the home, each spouse typically wants to take a share as part of the settlement agreement. But if one person wants to remain in the home, rather than sell it and split any profit, then that spouse will likely have to qualify for a mortgage on his or her own. Read more
A Short Sale may be an alternative when you can’t pay your mortgage.
It is called a short sale because you do put your home up for sale, but the mortgage bank agrees to accept a buyer that will not be paying the full loan amount, an amount “short” of what is owed on the loan. The bank is “shorted” After the sale the Seller is usually able to walk away from the home without owing the bank the difference.
There are occasions where the bank will seek a deficiency judgment against the former owner, so be sure to have this discussion with your agent and work to include language in your closing that protects you against deficiency judgments.
Why would you opt for a “Short Sale” versus a “Foreclosure”?
Student debt can adversely affect getting your first loan.
At LDSAgents.com we frequently encounter young clients who cannot qualify for a home loan due to high student debt.
“As students graduate with more debt than ever, those with student loans are getting worse credit scores and taking out fewer mortgages. At the same time home ownership rates among younger Americans sink to historic lows. College students who took out loans will graduate this year with an average of $33,000 in student debt, Read more