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I am currently in the process of trying to buy my first home for my fiancee, daughter and self. (I AM CLUELESS OF THE WHOLE PROCESS) The home is VERY reasonably priced. (Under $ 70,000) Its not much but a great starter home for us. We are applying for an FHA First Time Homebuyers loan with a large bank firm, and we have a co-signer available as long as the bank will approve them as well. I have what I would assume as good credit (650+) but no income. My fiancee has NO credit but makes slightly more than $ 30K a year. My co-signer has limited income but good credit as well(650+). Will this possibly make it a definite for us to get approved? My fiancee has alternative credit (The lease in our current rental is in his name and paid on time faithfully for 2 years) but that is all he has. Will they be able to use the credit score of my co-signer as well as myself with his income???

My next questions are about what the home has to be like to purchase. Currently the home has no carpeting in 2 of the 5 rooms, but does have tile and hardwood in the remaining rooms. As well as currently does not have a refrigerator or washer and dryer. Will this make us not qualify for the FHA loan as it needs work?? There is simple repairs that need to be made such as a few hole patchings in the walls as well as placing carpet into the 2 rooms as well as painting. All things that will be able to be finished within 2 weeks of getting the keys to the home. What are the requirements to construction needing to be done?

Closing costs…What are the chances of getting this rolled into the morg.? How much could they be on a home costing less than $ 70K?

As well as how would I go about getting a loan for more than the purchase price of the home? For such things as needed repairs?

Any advice or help would be appreciated. But I prefer answers with knowledge behind them by a person such as a broker, loan agent, realtor, or with a personal experience in the same feild. Thanks so much!

2 Thoughts on FHA Loan Approval with Co-signer? as well as regulation requirements? closing costs? etc.?
  1. Reply
    daniel r
    July 7, 2011 at 11:03 am

    You really should direct your loan questions to your loan officer as they will be the only one who knows all of your particular situation. The bank will look at the primary borrowers first then the cosigner. As far as the house goes, FHA does not usually look at cosmetic items to determine if the house will qualify. They want to look at structural items like roof, and foundation. The chances of getting a loan for more than the house is worth are slim and none, but you may want to ask about an FHA 203k loan. That is a rehab loan with money escrowed for predetermined repairs. closing costs are going to vary from state to state but a safe ballpark estimate will be between 4 and 5% of the sale price.

  2. Reply
    July 7, 2011 at 11:39 am

    Whether or not the house has carpeting has no bearing on an FHA loan. Neither does having or not having a refrigerator, washer or dryer. What they look for is if the electric in the house is in good condition (knob and tube wiring is acceptable as long as wires are not frayed, there are no flash marks in the electrical box which would indicate fires), that each livable room has a heat source or gets adequate heat in the room. They will look at paint to see if it is peeling, (if it is it must be remedied as they are concerned with flaking lead paint). They will check to see if handrails for stairways are present and in good condition. They will check for mold, leaks, etc. The roof needs to be in good condition. The foundation needs to be in good condition.

    If anything cannot be remedied by the time of closing, it will be stipulated in your mortgage agreement that an estimate needs to be presented before closing and 1.5-2 times the amount of repairs are escrowed at closing.

    Closing costs are not normally rolled into your mortgage but your offer on the house could be upped by 6% (as long as it appraises for that price) and you could have the seller then contribute that 6% back in closing costs.

    To be able to get a mortgage that includes the repairs you would need to apply for an FHA 203K loan.

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