co-signer for FHA loan vs. rent to own from relative? (or neither)
restoration service. We have been given an estimate of another year until out scores are above 750. We are close to (or at the 620 mark now). We are unsure if we will qualify for a FHA loan on our own right now and don't want to miss out on these low house prices and the $8000 tax credit. We can wait if we have to of course, but we have other options to consider. My sister has offered to either co-sign on a FHA loan or simply purchase a house for us and sell it to us once our credit is better (a year or so). The question is this:
What negatives should we consider for both options? (co-sign for FHA loan or rent a home to be purchased in a year)
I am sure there are fees and penalties to consider...Please help!
Tamara-
You do NOT need to have a 620 score to get approved now. That is a score requirement being impleemented to just about every mortgage broker and some specific direct lenders. I do not need a minimum credit score AT ALL to qualify you. Now that does not mean I can guarantee an approval, but please know that if you want to get approved, you can do so today in about 30 minutes. No need to wait. As for your co-signor, unless you need her for income purposes, you should be able to get approved without her. Lenders will still consider the lowest middle score of ALL borrowers so if that score requirement is in place, it does not matter what her score is.
Please trust me on this because I know how few lenders are out there doing what you need right now, but I am one of them. Call me if you have any questions.
Luke Allison
Bank of America Home Loans
828-777-8828
luke.allison@bankofamerica.com
Hi Tamara. Great question!
The first thing to do is talk with your lender about co-signing for an FHA loan. FHA has specific guidelines. Ask your lender!
The option of purchasing in a year is a good one, IF you can agree on a price and sign a lease-purchase agreement that determines your monthly rent, how much of each month's rent will go toward your downpayment, and like I said, purchase price. It has to be something you and your sister can agree on now.
You don't know what interest rates will be in a year - that is a big variable.
Feel free to email me - eschreiber@russlyon.com.
Thanks!
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