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wisconsinsunrise · Joined: 01 Nov 2010 Posts: 3 1.73 Dollars($)

My son is graduating soon and will be relocating to Michigan for a new job with excellent pay. He has no credit history and no debt other than fed. college loans totalling $20,000 that will be due next June. Credit reports only show the college loans -- nothing really good or bad on the reports and we did not pay for the credit scores. He would like to purchase a townhome or condo instead of renting. We believe he would qualify for an FHA loan with us as cosigners (we have excellent credit). Is this a valid option? Any other options? conventional? Or, does he need to wait to build credit first?

wisconsinsunrise · Joined: 01 Nov 2010 Posts: 3 1.73 Dollars($)

If you cosign for an FHA loan, is there any way to remove yourself from the loan after a few years other than the owner refinancing? Once he builds his credit and payment history, he won't need us on there.

(We also have another college student graduating in a few years and we have to do this again.) Smile

smithsussane · Posted: Mon Nov 01, 2010 8:22 pm Post subject:

Hi wisconsinsunrise!

Welcome to forums!

It will be better if your son could build his credit first and then apply for a loan to buy a property of his own. However, if he is desperate to buy a property of his own, then you can cosign for the FHA loan and help him buy it. After few years when he builds his credit, he can refinance the mortgage in his name and remove you from the loan.

Feel free to ask if you've further queries.

Sussane

Guest

I am going to be graduating school and then working for about a year maybe a little more before I try to buy a house. However I am not working at all while I am going to school, will only working for 1 year hurt my chances of getting a loan or effect my loan rate?
I know that you have to show your W-2 from the last 2 years so that is why I am concerned.

I also do not have much credit built as of yet but I am working on it, however it is difficult to do without a job. any ideas?

wisconsinsunrise · Joined: 01 Nov 2010 Posts: 3 1.73 Dollars($)

Sussane,
Thanks for your response. Since my son will have the income to purchase and pay for a townhouse, wouldn't that be BETTER than just throwing the money "out the window" on monthly rent just to build his credit so that a year or so later he could buy a townhouse anyway?

Thanks for your reply -- or any other advisors that are following this forum.

sara · Posted: Wed Nov 03, 2010 2:57 am Post subject:

Hi future RN,

Unless you're able to show an employment history of 2 years, it will be difficult for you to get a mortgage. Moreover, you should have a good credit in order to get a mortgage. You can check out the following steps in order to improve your credit:
http://www.mortgagefit.com/credit-rating/credit-repair.html

To wisconsinsunrise,

You can co-sign for your son's mortgage and he can buy a property of his own. If you and your son meet the required criteria of the lender, then your son can go for this option. However, it will always be a better option for your son to build his credit score and then look out for a mortgage.

Take care

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