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Home Buying Tips for Parents/Relatives
Home Buying Tips for Parents and Relatives
Parents and relatives today can help kids buy homes with more than just money. Many fear that their young adult children will never be able to afford a home in the Seattle area. They see prices going up and know that the interest rates may follow. Baby boomers can remember the HIGH interest rates of the late ‘80s. There are some awesome loan programs and buying opportunities that may prove beneficial.
Some loan programs allow parents and relatives to gift money to assist with down payments and closing costs. In a few cases, the gift can be for the entire down payment and closing costs. The kid must have income and reserves in the bank.
FHA Non-Occupying Co-Borrower:
This is a great program. The relative can buy the property with the kid as a non-occupying co-borrower. The kid needs good credit and that’s it! The relative qualifies for the purchase loan but all are listed on the loan and title. The kid is the owner occupant. In a few years the kid can refinance the home alone which will release the relative from the property.
The Federal and State governments offer some great programs as well to eliminate the need for cash on hand to cover down payments and closing costs. These programs are low interest loans from the state and non-repayment grants from the federal program. There is a required housing authority class required for these programs.
FHA Rehab Loans:
Want a great deal? The FHA Rehab Loan may be the answer. With this loan, the kid can find a fixer home that needs a little “TLC”. The cost of the improvements are put right into the loan. For example; a property costing $300,000 has $30,000 of work to be completed will net at $330,000. An inspector, contractor and appraiser will look at the property. The contractor will complete the necessary work and the work wanted by the borrower after closing. The transaction closes as long as the borrower qualifies for $330,000 and the property appraises at value. Sweet deal!
USDA Zero Down Loans:
This is a loan program that encourages buyers to purchase in rural areas. You will be surprised what is considered rural. In King County it’s basically East of Highway 18, a large part of Snohomish and Pierce Counties. It’s truly zero down.
These are just a few ideas of how young adults can get started in home ownership. Contact me today if you have any questions about these programs or any other questions about buying or selling real estate. We can get together to discuss all the options open to you and bring my trusted lender into the conversation for current information on all the loan programs.
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