Thanks for the responses. I knew I should have posted more info but the forums have been acting up lately and running slowly.
Am I misunderstanding this? You need a cosigner? Like, your parents are going to cosign the loan in order to get the bank to lend you the money?
Yes, if possible.
If you need a cosigner, you aren't financially ready to buy real estate. A cosigner is your business partner for investment property.
What if my parents bought a house and then sold it to me? Would that make them business partners?
Maybe not. OP is 20 years old so he may just not have enough credit history to satisfy the bank. He should keep in mind that if he doesn't make payments or the value of the house drops so that he is underwater on the mortgage his parents would be on the hook for the entire mortgage amount.
Exactly. I have perfect credit but not enough credit history. What you're saying is right - I would need to have it occupied at all times to make sure there is enough to cover all payments.
Grasshoppa, much more learning before you buy home you need. When you can answer your own question posted here, you may be ready. Come back when you have some down payment money and don't listen to the no down payment late night infomercials.
I can get down payment money. I'm thinking I can have $15k by next year. That's enough for a 20% down payment on a 75k house.
The 4.25% indicative rate by the bank was likely for owner occupied (non-investment) property. Of course, it's possible to buy for owner occupancy, then move out and re-classify as an investment property.
Good point; what do you think the rate would be if it was classified as an investment property?
You have not given us enough information to answer your question. What is your cash, credit, living and employment situation? Why do you need a co-signer (red flag)?
I am currently making about $20k/yr. I do have pristine credit, but only 7 month's worth :/
Once I kill my federal student loan debt this summer, I will have cash to invest. I plan to max out my Roth IRA immediately next year and then have leftover money to invest more. I live at home when I'm not in college.
Doesnt sound like you are ready. At over 4.25% interest the rental will not provide u with much passive income and in fact could be costing you money.
Right now I'm not interested in passive income as much as I am building home equity. I'd want to have all of the additional money after all payments to be put down on the mortgage to reduce it faster. Once the home has been paid off then it can become passive income.
Maintenance and repairs on homes area real cost. Whats gonna happen in a few years time when u gotta spend 10k for a new roof?
:(
Better to invest in other more liquidable areas until you have have enough capital to throw into a very fixed long term investment over leveraged home mortgage. Dont rush into real estate until you are really ready with more capital, more knowledge and more financial stabilty ( aka good long term job outlook)
It seems like the real estate market is very good right now which is why I want to jump on it. I am reading real estate books now (ones this forum suggests!).
Everyone I've talked to in person say I'm not ready but I'm getting more opinions on here. From the looks of it so far I should bite the bullet, give up, and sit in the corner sulking. But seriously, I'm just trying to get a benchmark where I am so I can set myself up for later.