Profile picture for PhillipCh

geting loan with temporary co-sign in Washington state

Hello,

I live in Washington state.  I am single and only make 63K a year and I have car debt which I pay 340 monthly.  As for my credit, I have very good credit.  I am interested to get my first house between 300 to 350K range in King county area, hopefully to get the house by the end of year.  After doing some researches online, I know my income alone won't get me qualified for the loan to buy the house in that range.  So I wonder if I borrow my sibling name(who makes more than me) for temporary as co-sign to get the loan so how likely am I to get the loan?  If I can get the loan, is it possible to remove my sibling name?  If that is possible, how long will I have to wait to be able to remove the name?    Please give me some advice on what direction I should go.

 Thanks.

  • May 29 2013 - Rainier Beach
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Answers (10)

Best Answer

Profile picture for daveskow
Phillip - realtive  can  assist  as co signor on FHA loan .....likely not on a  conventional loan

being a co signor / co borrower is  permanent ...only way to  remove the  cosignor from a loan is to refinance the loan  ( fyi - there may be  state of washington  excise tax  consequences / fees to pay down the road when removing a party from title and loan)

I would recommend  getting  pre approved asap to determine  what the best options are
  • May 29 2013
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Hi Phillip!

I'm sorry for reading this post late.  I'm not sure if you are still looking for better answers to your purchase scenario.

If you are, I hope you can read this because although you could have your sibling be a non-occupant co-borrower on an FHA loan, that would not be a smart decision due to the fact that most FHA loans require monthly private mortgage insurance that now stays on your loan the majority if not the whole duration of your loan term.

It really surprises me that nobody here told you with your income of $5,250/month and good credit, you can qualify for a Conventional loan with no private mortgage insurance and no high fees like FHA requires.  

This also makes it possible for you to buy a home in the $300k-$330k range, depending on the property taxes and homeowners insurance quote.  If you would like to buy a condo, the purchase amount you qualify for would be a little less than this because of the required monthly HOA dues condos have.

Also, depending on how good your credit score is, you may not need to put the full 20% down on a Conventional loan and can put as little as 3%-10% and still not require PMI or high fees like FHA would.

I hope this helps.  Let me know if you have any other questions to help you through your buying process.

- John
  • June 15 2013
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Profile picture for daveskow
6/7/2013

Phillip - hi there ....have you begun the pre approval process yet?
  • June 07 2013
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Profile picture for daveskow
Phillip - thanks for the question .... since you asked - our firm ( Eagle ) can assist with a  free  pre approval ...process is simple / easy / efficient and  can be done  via  email / on line / phone / fax  ( however its best for you)
  • May 29 2013
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Profile picture for Vijya Patel
The best way to have all your financial questions answered is to sit down with a lender and go over your situation. As others have already said here, co-signing on your loan can have a huge impact on your siblings credit and should not be done without knowing the full ramifications.  It may be better that you lower your purchase price. It is very possible to find good homes in King County for under $300.
  • May 29 2013
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Profile picture for PhillipCh
John Stewart, I haven't looked into wshfc website yet.  As for my down payment, I am able to do 20%.
  • May 29 2013
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Profile picture for PhillipCh
Dave Skow, thanks.  I will look into FHA.  Do you know where should I go to get pre-approve for loan?
  • May 29 2013
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Profile picture for PhillipCh
wetdawgs, thanks for replying.  right now I am  paying the mortgate for 1600 for year now for my other relatives so i think as long I am not severely sick or the economy doesn't get worse, I am able to make the mortgage payment.
  • May 29 2013
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Profile picture for nwhome.us
There really is no substitute for sitting face-to-face with a loan officer and getting into the details of what different products are available.
How much of a down payment do you have.  Have you looked into www.wshfc.org?
  • May 29 2013
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Profile picture for wetdawgs
What does co-signing mean?   Usually it is done when (like you describe) someone does not have sufficient income to qualify for a loan.  Co-signing means the co-signer is fully responsible for payments if the primary person (you) can't make the payments.  It appears on their credit report as a debt, and if payments are skipped it dings their credit report.   Your sibling should not do this lightly because it will affect the sibling's debt load (and therefore their ability to get their own loans) and if you default you can destroy the sibling's credit.

You will be able to refinance in your name only when you have sufficient income to qualify for the amount of the loan.   If you don't see this happening in the next few months, perhaps it isn't time to buy at your target price.

  • May 29 2013
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