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The Family Piggy Bank The Family Piggy Bank

Mortgages and Cosigners

Posted by on Mar. 27, 2013 at 6:44 PM
  • 9 Replies

Hey ladies!

My husband and I are getting ready to purchase our first home. We have found the perfect house for us and everything was looking great. Income, credit, all that jazz. Well, then the issue of overtime got brought up. My husband has been with his current employer for 6 months-- we moved here last year from another state. He was at UPS for 6 years prior to the move. Well, he now makes the majority of his income from overtime. Overtime IS a regular part of his job. He works shift work: 3 days, 3 nights, 3 off (so essentially, 6 on 3 off, repeat) and 12 hour shifts. This averages out to about 62 hours per week. He also gets a vehicle allowance and a "per diem" that we aren't factoring in.

Well, we just found out that because he hasn't gotten overtime for the past 2 years, they cannot consider that as income-- which DRASTICALLY reduces what they will consider as income. I work very part time taking care of kids and am not a W2 employer. Which I am kicking myself over, because I left my FT job just 5 months ago (due to my husband and I going days without seeing one another.. it just wasn't worth it).

We have someone who offered to cosign with us. He is extremely wealthy and there is no issue of trust at all whatsoever. I am pretty confident that he could just buy our house outright if he wanted to, lol. We are so thankful for him and are leaning towards this option. However, we are quite bummed about having to bring someone else in (even though he will be paying no money whatsoever). We plan on refinancing in 2 years so that we can remove his name from the loan.. but I have heard interest rates are going to start going up this year (they went up .25% in the first week we started looking for a house!) so there's no telling what rate we may end up with. But, if we wait 2 years to purchase we will end up with that potentially higher rate anyway.

We have to move regardless. Our lease ends in April and we had to give a 60 day notice. After starting the process and being told everything looks good, we went ahead and gave our notice to avoid paying rent and a mortgage at the same time. My inlaws live here, so if we don't close in time we can stay with them until everything is settled. No biggy. We do not want to continue renting-- we'd rather put that money into something that we will eventually own. Plus, we desperately need a yard for the dogs. We are also TTC, and I really don't want to move now, then again in a couple of years.. I've had all the moving I want!

I guess a cosigner is the only option we have. Would you go through with it and have the cosigner if you were in this situation? Are there pros or cons that we haven't considered? (yes, we know that the cosigner would be affected if my husband (God forbid) lost his job, became disabled, etc)

Thanks for any insight/advice. I guess I really just need to talk it through. :)

~Amber

by on Mar. 27, 2013 at 6:44 PM
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Replies (1-9):
Larsbug
by on Mar. 27, 2013 at 11:11 PM
1 mom liked this

 does your gut tell you it's a good idea? I always go by gut instincts, and they have never failed me.

abiddinger
by New Member on Mar. 28, 2013 at 7:01 AM
Yes! I think I'm just afraid I'm confusing gut with my wanting this house so badly. :-P I prayed for some kind of confirmation on the house and that very night is when he offered to consign with us if we needed. Maybe I should stop worrying and just be grateful! :) thanks so much for the reply!

Quoting Larsbug:

 does your gut tell you it's a good idea? I always go by gut instincts, and they have never failed me.

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Larsbug
by on Mar. 28, 2013 at 10:06 AM

 I would take that as a sign...

Quoting abiddinger:

Yes! I think I'm just afraid I'm confusing gut with my wanting this house so badly. :-P I prayed for some kind of confirmation on the house and that very night is when he offered to consign with us if we needed. Maybe I should stop worrying and just be grateful! :) thanks so much for the reply!

Quoting Larsbug:

 does your gut tell you it's a good idea? I always go by gut instincts, and they have never failed me.

 

QuiltLover
by Jocelynn on Mar. 28, 2013 at 10:10 AM
3 moms liked this

I am more "old school" with the thought if we couldnt do it on our own, it isnt time to do it.  I dont like being obligated to ANYONE for my finances and feel it is up to us to work things out to do it on our own. If you are comfortable with the choices youve made, then it is only your business to make that decision. Congratulations on your house find...it is exciting getting into your very own home.

MonarchMom22
by New Member on May. 3, 2013 at 1:37 PM
2 moms liked this

In my experience when it comes to money there is no such thing as "no issue of trust at all whatsoever"

no one can see the future... You or hubby could have a health issue, accident, marriage problem, etc. 

I would not want anyone else on a loan or deed but my spouse or partner.  There are other houses that won't entail this complication.  Just my opinion.

baconbits
by Bronze Member on May. 6, 2013 at 11:13 AM
1 mom liked this

 Something else to consider is that you could pay 100% of the money owed on the home but you actually only own 1/2 of it. The co-signer could say that it is 1/2 theirs as they are on the title as well

Alwaysmotivated
by Member on May. 6, 2013 at 8:19 PM

Its darn if you do and darn if you don't, there are a lot of what ifs to be considered with a co-signer.. How much about this person do you know. Is he in good standing with his taxes, you are liable for his misfortunes as he will be for yours..Not to scare you but just do your research and follow your gut feeling.. Yes it might be nice but think about it a house it the ultimate dream and money and not to be taken lightly..Good luck to you..

FindersKeepers
by Bronze Member on May. 7, 2013 at 1:31 AM
1 mom liked this

This is a BAD idea.    You should not get that financially involved with anyone with something as important as your house.  

I know that you really WANT this house, but if it is not the right time for you, then it is not the right time.   So many people lost their homes because they got in over their heads.   The reason the banks have that rule is because companies can and do decide to cut overtime when things get tight.   Your DH has only been at his job for a few months.  

There will be other houses... let this one go and take some time to do the things that will put you in a better position when you are ready.... If you can live with your inlaws for a while and save a bigger down payment then that will reduce the amount you need to borrow, continue to improve your credit and in a bit your DH will have been at his job longer.  

Most importantly, do not feel pressured to buy a house because "everyone says... "...  Regardless of what the market is doing, you have to honor your budget.  If you buy too early you can put yourself in a really stressful situation...

FindersKeepers
by Bronze Member on May. 7, 2013 at 1:36 AM

One other option is to ask your realtor if the home owner would consider a rent to own situation for a couple of years.  

They might say NO, but it never hurts to ask.

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