Co-Borrowers & Gift Funds

Buying a Home with Help

It can sometimes be hard to buy a home. Most first-time homebuyers need help from friends and family. Don’t be afraid to ask for help. It was a lot easier for people to buy a home in the past. Income has grown slowly, while home prices have skyrocketed. Sure rates where high in the 70s, but home prices were a fraction of buyers income that they are now. There are ways to get help that can get you into the market so you see the equity growth others have benefited from overtime.

Gift Funds

While there are zero down options, and conventional loans requiring as little as 3% down, a down payment can be a big help to lowering your overall payments as a homeowner. It is important that once you buy a home, you can manage the monthly cost of homeownership. The less you have to borrow for a mortgage the lower your payments will be. If you can get to 20% down you can also avoid mortgage insurance. Getting gift funds towards your down payment can be a blessing.

Tips: These funds don’t need to be sent to you first. The giftor can send the funds directly to escrow, that way if the home purchase doesn’t go through they can get their gift back.

Co-Borrower or Co-signer

Friends and family can help you qualify for a mortgage by being included on the mortgage. This doesn’t mean they have to be on the title as the owner of the home, or even occupy the home. Co-borrowers can add their income to yours in order to help you qualify for the loan you need to buy. This can be a great solution if you have had recent job changes that are not yet being accounted for in your qualifying income. Be sure you can still afford the monthly payments! Missed payments will effect your co-borrower’s credit score. The monthly debts associated with the property can be removed from a co-borrowers debt-to-income if they want to buy another home in the future. To remove the property from future DTI calculations a co-borrower can show that the owner they co-signed for is making all payments associated with a property in the last 12 months.