First time buyer question

I am hoping one of you ladies could answer this for me, my husband and I are starting to save so that we can possibly by a house within the next year or two. My husband was on his mother's mortgage and on the deed. She recently refinanced and took him off the mortgage but he's still on the deed. Does this hurt us at all? Will we qualify for any first time buyer tax credits or loan options like an FHA?

Re: First time buyer question

As far as an FHA loan, you don't need to be a first time buyer. Any buyer (who qualifies financially -- credit, debt to income ratio, etc.) can get an FHA loan. With an FHA loan, you only need 3.5% down and you can roll in up to 6% of your purchase price into your mortgage to cover closing costs (rather than paying them with out of pocket cash). Also, there are no gift restrictions with FHA loans, as far as the down payment goes, so you could get all or part of that 3.5% as a gift (if you were so lucky to have someone willing to gift you the money).

I think the fact that your DH already owns a home with his mother (since he has been and still is on the deed to her house) would disqualify you for any first time buyer programs, assuming your husband will be on the deed to the home you purchase. But I work with a LOT of first time buyers, and I don't really know of any specific programs/benefits that are out there right now for them. If you are talking about tax credits/benefits, definitely consult with an accountant, because the tax code is complicated and evolves/changes over time.


As far as the implications of your DH having been on his mother's mortgage previously, it could impact his credit (depending on whether there were any delinquencies, etc.). But now that he's off the mortgage loan, it won't impact your debt-to-income ratio.

My best advice would be to consult with a mortgage professional asap and find out whether you and dh qualify for a loan now and how much, and if not, what you need to do to qualify (credit repair, pay down loans, etc.). You don't want to spend a year or so waiting and saving, only to find out there is some obstacle to getting a loan that you could have fixed if you had known about it. There's no downside to talking to a mortgage pro -- they can preapprove you if you qualify, but you are not locked in or committed to using that lender or loan officer. But the more info you have upfront, the better.

Also, interest rates AND prices are on the rise, so you may be better off buying now (utilizing the FHA loan program if you are short on cash) rather than waiting to save up a bigger down payment. The amount you can save in a year or two will probably be more than offset by higher rates and prices (in terms of your monthly payment). Plus, as rates go up, people qualify for a lower mortgage amount. So you may not be ABLE to buy in a year or so if you wait.

As I mentioned, I work with many first-time buyers. It's really my area of expertise, so feel free to contact me with more questions or to set up a consultation. [email protected] or (516) 587-7618.

Good luck!