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About Craig Ballhagen
Expertise
All questions regarding home purchasing and refinancing

Experience
licensed in Ca and Idaho with over 15 years of experience

Organizations
Boise Young Professionals, Association of mortgage bankers

Education/Credentials
BA Sacramento State

You are here: Experts > Shopping > Home Buying/Selling > Real Estate Home Mortgages > Gift of Equity

Real Estate Home Mortgages - Gift of Equity

Expert: Craig Ballhagen - 9/24/2009

Question
QUESTION: I am wondering. My father in law is selling his mothers house to my wife and I. The first appraised value of the house is 143,000, I am unsure what they will sell the house for. My wife has little better score than I do but I have the most income at 53,000/year and been on the job for 3 years. My father will be a co borrower will we be able to do the tranaction under the gift of equity loan requirements. Thanks

ANSWER: If you are using a non occupying co signer, you would be best to go with an FHA loan. All of the equity and closing costs can be gifted. If you make 53k you shouldn't need a cosigner unless you have allot of debt. Your scores need to be above 620 for FHA and you can not have any late payments on any accounts in the last 12 months. Please let me know if this answers your question. If not please re send the questions. thank you

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

QUESTION: I know that my score is not in the 620 that is the reason for the co borrower. My wife stayed out of work for three years caring for our 3 kids before they entered school age

Answer
A co signer does not off set your scores. It only helps you income qualify. Probably the best thing for you is to do a lease option and by the house in a year or 2. That will give you time for your credit scores to come up. If your father is going to be living in the house as a co borrower, then that is different. He would be on the loan by himself and you would refinance him off later.. Please let me know again if this helps you out or not-thanks

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About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here