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Arizona Mortgage Question of the Day: Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?
Arizona Mortgage Question of the Day: Can I qualify for an Arizona mortgage if I have co-signed on a loan for another person?
Well, kind of.
There is a NEW Arizona mortgage underwriting rule for this. IF you are qualifying for an Arizona mortgage and you have co-signed (for example for your son to buy a car) BOTH you and your son need to be on the NOTE to repay. Your son makes the payments on time each month (out of his OWN individual account) then he can provide cancelled checks to show HE makes the car payment. By doing so, you can qualify for your Arizona mortgage without having that payment included in your debt.
IF, instead, you initiate the loan FOR HIM, you are on the ONLY borrower on the NOTE, then you have to qualify for your new Arizona mortgage WITH the car payment regardless of who makes the payment.
It always angered me that my father would never co-sign on my behalf, to establish credit. After what I have seen on individuals mortgage credit reports, I now understand his concern. Although we all know, I would have made all of my payments diligently 🙂 …… the alternative possibilities are scary.
I would always discourage anyone from co-signing on behalf of another person, however, in certain circumstances it can not be avoided. IF this is the case- just ensure you are BOTH on the NOTE.
Having a dream is good, owning one is better!
Leslie Nilsen
Owner/ Broker
First Class Financial Services
602.294.9288 (p)
mortgagedr@fcfs.net www.fcfs.net
Buy AZ investment properties! Buy AZ investment properties! Buy AZ investment properties! (subliminal message)
Buy AZ investment properties! Buy AZ investment properties! Buy AZ investment properties! (subliminal message)
NOW IS THE TIME! Buy Arizona Investment Properties!
Why am I saying this again? I know from personal experience! I recently got married. Yes. Yay for me! In doing so, we bought a house together. This required me to determine what I was going to do with the house I already owned. Never having been a landlord, I was concerned. My fear was outweighed by the fact that I am underwater on my mortgage. Leslie Landlord here I am! S
o, I listed it as a rental in MLS and waited. What? 35 minutes? That is probably a liberal guess. My phone INSTANTLY started ringing. Literally.
Now I know I am not telling you anything you don’t already know I just thought from hearing my personal experience you may have a different listening for the story.
In 21 days, I had over 15 people look at it. More who just called but were eliminated from the amount of the monthly rent. I have put my heart and soul into remodeling the property so I wanted to find just the right tenant. In the end, I had several applications, all from qualified tenants, to choose from! Hopefully, I found the tenant that is going to care for my property as their own, and given their prior landlord verification, they will leave it nicer than when they got it! Now thats the tenant anyone would want!
With rates being CRAZY low, property availability still abundant enough to find viable options and even HOMEPATH financing which allows for 10% down and no appraisal…why would you NOT want to look into the next level of investing?
Wish me luck!
Having a dream is good, owning one is better!
Leslie Pelletiere, Owner First Class Financial Services, proudly mortgage lending since 1999!
602.294.9288(O) 602.294.9830(F)
MB#0902810
NMLS #162494
AZDFI Loan Officer # LO-0911453
More AZ First Time Home Buyer Tips (really tips for ANY buyer!)
In Arizona, as in most places, if you are a first time home buyer, you can be overwhelmed with the process of purchasing a home.
Here is a bit more guidance:
First, when your realtor says “Location.Location.Location.” Just trust them. It is critically important. The bottom line is, you can change virtually anything about a house, you cannot change where it is located. Again, just trust us on this one. Clients like to convince themselves into things. This one cannot be compromised.
Second, USE your realtor. Remember, your BUYER agent is paid by the seller so there is NO reason not to use a realtor and use them to your advantage. They have done this “home buying” thing before. They know what, when, who, where and how to look for real estate…. and how much! The “how much” is the biggest thing on everyone’s minds these days…”how much” is not everything though… You realtor can walk you through all sides of it.
Third, get pre-approved. I know. I’m beating a dead horse here but full disclosure, it will not be the last time I bring it up. Use the mortgage calcuator at http://fcfs.net/loancenter-calculators-monpmt.aspx – this will help you get an idea of your potential monthly payment. Get your head around what you are comfortable with AND what is realistic. Fourth, after you have your monthly payment from using the calculator- don’t forget to add in your property taxes (go estimate is .78% of your purchase price is ANNUAL taxes – divide that by 12 to get your MONTHLY taxes) and go to http://www.iii.org/media/facts/statsbyissue/homeowners/ to get stats on average home owners insurance rates. You can use a factor of .35% (same way as above) to get an estimated amount as well. These will be added into your monthly payment so you want to be prepared for your FULL payment not just principal and interest.
NOTE: Don’t forget about potential home owner association fees!
Fifth, not sure? You may want to see the comparison of what is costing you to rent versus the benefit of home ownership- try out this handy tool to see the true impact – http://fcfs.net/loancenter-calculators-rentvsown.aspx – I can save you some time and just tell you that the value of home ownership will substantially outway renting (in this current Arizona market) but sometimes seeing it is believing it. Remember, these are just items to give you some direction. Your loan officer and your realtor will walk you through all of these steps. The more you know before you start the better educated you will be during the process!
Having a dream is good, owning one is better!
Leslie Pelletiere, Owner
First Class Financial Services, proudly mortgage lending since 1999!
602.294.9288(O) 602.294.9830(F) www.fcfs.net
MB#0902810 NMLS #162494 AZDFI Loan Officer # LO-0911453
To Condo or not to Condo?
Ugh. Condo’s. I don’t want to be a big downer on condo’s but… here it comes. Specifically to Arizona, condo’s are increasingly more and more difficult to lend on. There are several reasons for this but primarily the lenders make a distinction between whether the condominium project is warrantable or non-warrantable. Simply put, lendable or not?
Conventionally the project needs to meet a miriad of restrictions: (this is the short list.. there are more)
* 70% of the units need to be owned and occupied as primary residences.
* The HOA cannot be in any litigation with the homeowners.
* One owner cannot own more than 10% of the units.
* The HOA cannot have more than 15% delinquency.
* The HOA has to be turned over to the owners.
* In a new construction project, 90% of the units have to be delivered.
* The HOA has to carry a minimum of a $1million dollar liability home owners insurance policy and carry an employee dishonesty rider (Many other insurance requirements but this tends to be a big one)
For FHA, the project needs to have received its NEW FHA approval (all FHA approved condo projects needed to get reapproved in 2010)
Given the above restrictions, you can see why I would be a big downer on condos. With the amount of default we have seen in the state of Arizona, most projects have a higher than 30% investor occupancy. Many investors have gone in and bought several units and made the projects ineligible OR the current owner is in default/ delinquent on HOA dues.
I understand the draw to the condo projects as there are many that are priced too low to pass up. Ask the right questions initially in order to determine if it is eligible for lending. On a conventional loan, the HOA MUST complete a “Condo Questionaire”. Most HOA’s do not hand complete them any longer. They are typically done through HOA Questionaire Services for a fee.
My last question? How difficult will it be to re-sell given the difficulty today?
Having a dream is good, owning one is better!
Leslie Pelletiere, Owner
First Class Financial Services, proudly mortgage lending since 1999!
602.294.9288(O)
602.294.9830(F)
MB#0902810
NMLS #162494
AZDFI Loan Officer # LO-0911453
First Class Financial 