Buying or Selling a Home/FHA loan and Co-borrower

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Expert: - 11/26/2007


Question
My boyfriend is interested in purchasing a home for 150,000. It is well below it's appraisal value of 168,000. He would like to do an FHA loan and only has a credit score of 552. His monthly salary is also only 1550 a month net. He does have a second job that he just got and I pay him 700 a month for my share of the living expenses. His income on paper does not come to under even a 50% debt ratio. His father has a perfect credit score and makes over 60,000 a year ( that not including his mom's income either ). His dad currently only has a loan out for $50,000 and is willing to cosign with him on this new house. Can you get a loan if you don't make enough a month (according to there standards, and proof of financial statements ) and have a lower credit score if your cosigner has an excellent credit score and a very low debt ratio?

Answer
Hi Liz,

Without looking at a complete loan package, I can't say for sure that your boyfriend can get a loan with a co borrower, especially according to FHA guidelines. But it is definitely possible for someone, who would normally not qualify otherwise, to get a loan with a co borrower.

The lender will not be looking at the home's appraised value for built in equity, only at the borrower and co borrower's ability to repay the loan. Unfortunately they will not include your contribution to the monthly expenses or your boyfriend's second job income since he just got the job. But it sounds like with his dad's income this area would be covered. Your boyfriend and his dad need to get with a local lender to complete a full application and get pre approved for a loan.

Good luck!  :)

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Diann Tonnesen

Expertise

I have over 25 years of experience in real estate in Las Vegas. I can answer almost any specific question about buying or selling homes, condos, high rise properties or land in the State of Nevada as well as general real estate questions that pertain to the industry as a whole. I can also answer questions related to financing on FHA and VA loans, conventional loans, interest only loans, stated income loans, and hard money lending. You can also go to my site at http://www.greatlasvegashomes.com which has lots of information on it as well.

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With my husband I have been helping families call Las Vegas home for over 23 years and I still love it! We developed a strong niche in the Internet industry and had to start a team of agents to respond to the large volume of calls we were getting. Currently we have 18 full time agents, a sales manager, two leads managers and two transaction coordinators assisting us. Last year we helped over 280 families and investors find property in Las Vegas.

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Top agent in the state of Nevada for sales multiple years when working for Century 21 and last year one of the top 10 agents in the country with Prudential.

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