My Fiancee and I are planning to start looking for a home within the next year. Her parents want to buy another home to rent but want her to apply for the loan to take advantage of any first time home buyer loans and then take the house off her name.
I don't know the exact details but my question is, if she does this will that affect us when we want to buy a home? and how? thank you in advance!
=====ANSWER=====
Hi Vic,
Sorry for any delay on my part.
I see your concern here. If I understand your question right, your future in-laws want your fiancee to buy the house in her name. If this means that she will be the one who qualifies to get the mortgage and they will be making the payments, this very likely will not work anyway.
To get the house in her name, she has to meet the lenders guidelines for income, credit worthiness and proper documentation to qualify for the home loan.
If her parents are looking to take advantage of any first time home buyer loan programs, I just cannot see how this would work.
Perhaps they are planning to go on the mortgage to help her get a house by becoming a non-occupied co-borrower, I'm thinking that this may be what is in their minds. You would have to find a loan program that allows this.
Maybe they want to get the house using the first time home buyer programs out there and then she will be quit claiming the deed to them. Again, this may not be that easy since today, all mortgages have a "due on sale" clause.
There are many details to this deal I would need to know before giving a definite answer.
If your fiancee is on a mortgage when you go to buy a house together, this would create a possible issue because now she has to qualify for 2 mortgages. So she would need the income to do so.
This is kind of a hard situation for me to answer, but I do know that the lenders these days are very critical when looking at possible borrowers. It's best to keep your self clean and free of any possible unusual deals that may hinder your chances for a future mortgage.
Honestly, unless your local government has some kind of a first time home buyer loan program that makes this worthwhile, this kind of arrangement might make things hard for you and her.
I wish you the best. Owning home is still a good investment for your future.
Great question!! I agree with your concerns. It appears like the parents are more interested in themselves and not you. It is so wonderful that you are checking things out before you make that decision!
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