Expert: Jessica Bryan - 2/25/2008

Question
QUESTION: My son has been living with me now for the past 6 years because that's when I became disabled.  He has paid my mortgage and utilities all this time.  Now he wants to buy his own home. When he goes to a loan officer will they need proof of his past history as far as paying his rent? He has just been paying my mortgage and signing my name to the check. He is a first time buyer.

ANSWER: Dear Deb;
If he is paying your mortgage and signing your name to the check then how is he is the one paying?  Isn't it coming out of your account?  If so, then he has done nothing to establish his own credit history. Even though he writes the checks in a timely manner, a bank will want to see that he was the one with the account. A bank will not give a loan to someone who has no credit history.  My advice is for him to visit a lender and find out what his credit rating is if he has one and then to discuss how much he qualifies for in a loan.  If he doesn't qualify, the lender will explain some things he should do to establish a credit rating and then begin implementing the plan.  At the time he wants to buy a house, he will need at least some kind of proof of having made monthly payments on something, even if it is a phone bill, a credit card or a student loan.

Best wishes,
Jessica Bryan

---------- FOLLOW-UP ----------

QUESTION: Thanks for being sooooooooo quick to answer.  My son does have a credit history, student loan paid off, car paid off, medical bills paid off.  The thing is he has paid my mortgage and utilities because I have had no income other than a small disability check each month which would not have even touched the cost of the mortgage let alone utilities. My question is should he start signing the mortgage payment with his name to show he has a history of making monthly shealter payments. He claims me on his income tax as a dependent because he supports me more than 50%

Answer
Dear Deb;
Since the home is still in your name I doubt that it will make much of an impact on the underwriters.  However, I would suggest that he speak to a lender to find out if there is some way he can show that he is the one making the payments for an improved credit history.  Also, as a first time buyer, speaking with a lender early in the game will really help him to understand the entire process of buying a home.  He should also contact a real estate agent to discuss what he will need to do and what to expect in the real estate market.  Since he has established credit it will be much easier for him to buy a home.  

Best wishes,
Jessica Bryan