co-signer wants out--help - Posted by Jat

Posted by Jat on July 15, 2001 at 07:58:21:

Jat, As Monique says, 7 months of on time payments is good but probably not enough. You may want to contact Ed Garcia who contributes here and moderates the Financing forum here. If he can’t do it he may at least be able to help you figure out how and when.
All the best, Lyal

co-signer wants out–help - Posted by Jat

Posted by Jat on July 14, 2001 at 12:36:28:

We bought a house 7 months ago. We have terrible credit and could not qualify for the FHA loan. A friend qualified for us, 3% down,FHA @ 8.5% interest for 30 years. We are on the title but not on the loan. We paid all the cost and payments.

Now our friend who signed the loan for us wants to buy another house. As such, wants out of this loan that he has signed for us. What can we do now to release him from the loan obligations but still keep this house?? We would like to have loan in our own name. But we don’t have the credit or additional downpayments. Please advise.

Original sale price was: $226,000
Loan amount: $219,000
Interest rate : 8.5%
Term: 30years FHA
Monthly PITI: $2048

Recent sales in same area, same type houses:$250,000

What can we do at this time??

Re: co-signer wants out–help - Posted by MoniqueUSA

Posted by MoniqueUSA on July 15, 2001 at 06:16:58:


If your payments have been made on time each month, you have takens the helpful steps toward rebuilding your credit.

7 months of good payments is good, 12 months is even better. If your friend is buying his house 5 months from now, it will be a little easier for you to qualify.

A mortgage broker may be able to help you apply for a subprime loan geared toward folks with challenged credit. The interest rate will more than likely be higher than 8.5%, so your income will need to support a higher monthly payment. The points and fees will also be on the high side.

If you are a member of your local Real Estate Investors Association, ask around to find out who some of the better mortgage brokers are in your city. The ones that the active investors use to get their buyers qualified for mortgages, day in and day out.


Re: co-signer wants out–help - Posted by lyal

Posted by lyal on July 14, 2001 at 17:37:58:

Jat, I’m no expert but one idea that comes to mind is to generate the paper-work (mortgage and note or trust-deed depending where you are) that he can show the bank to prove he has “sold” this property to you with owner financing. Your payment to him would offset the payment due to the bank (actually just you making the payments directly). Would be similar to someone buying “subject to”.
Not sure what effect the fact that it’s an FHA loan has if any.
Just one idea, Lyal

Re: co-signer wants out–help - Posted by Jat

Posted by Jat on July 14, 2001 at 18:50:58:

Is there any way to refinance under our own names even though we do not have good credit??? Does anyone know of lenders who can help our situation???
Please advise.