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Eligible for $5000 Closing Cost Loan if My Parents Co-Sign for Mortgage.

by Zachary
(Jackson, KY USA)

I am in the process of buying my first house. I am 24 and buying my first house.

I have already been approved for a loan of $150.000.00 and my parents will be co-signing for this loan. I don't have to put anything down at our local bank.

There will be closing cost and other fees with the purchasing as usual, but will I qualify if there is any money left in the government loaning of the $5000.00 for New First Time Home Buyers for Closing Cost?


Zachary S.

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Closing Cost Loan
by: Jeffrey

Hello Zachary,

Thank you for stopping by my website and asking your questions.

Congratulations on getting pre-qualified for a home loan. It looks like home ownership is on the horizon for you. Buying your first home at 24 years old is awesome!

You have not given me very much information to go on so it's very hard to help you. So if I make a few assumptions, I will try to paint a picture for you.

First and foremost, the best reliable source for answers would be your lender. Talk with them about your concerns.

In answer to your question about help with your closing costs using the down payment loan available in your state. In Kentucky they appear to have 3 down payment assistance programs for first time home buyers.

The first one, Hardest Hit Fund (HHF) DAP appears to be closed at the time of this writing (April 2016) so you're not using that one. The other two, Regular DAP and Affordable DAP are actual loans with interest and a repayment plan. So whatever the lender guidelines are, you have to follow these. Questions you need to ask would be if they allow co-signers or not? If they do, what are the requirements so you can use these funds?

You say the local bank will not require a down payment. I'm not sure what kind of a loan program you're looking at that has zero down payment unless it is the USDA loan. These are loans that allow you to buy a home in a Rural Community.

You also mentioned your parents are co-signing. USDA Co-Signers take on the responsibility of repaying the loan in the event that you don't.

There are many situations in which perfectly responsible people like yourself, looking to buy a home will attempt to qualify for a loan and be unable to because they do not meet the minimum qualifications.

So if this is what's happening in your case, the only unknown is the down payment assistance loan.

So do your research, ask the lender who is offering this program to you what their guidelines are. If the qualifications of this secondary loan is like your primary, then perhaps you can use that money for the closing costs and have little or no money out of pocket.

I wish you the best, thank again for visiting my website. Please like, share or comment to help pay it forward to others.

Regards,

Jeff

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