Real Estate Professional · Madison, GA · Member since 2016 · 2 posts · 0 votes
Hello bigger pockets community!
My name is Logan and I'm from Atlanta. I am well on my way to purchasing my first house, which I will househack. I am one year into my first sales job, so commission is not counted as my income. I want my father to cosign on the loan so I can get into a house that fits my plan (200-230k). With my 24k salary, I am only approved for around 130.
My father is reluctant and I can't say I blame him. Even that I have roommates lined up and my actual income is around 90k per year, consigning on this loan still carries a risk... especially in the u.s. In these present times.
One option that has been presented to me is to cosign, and then change the deed to a quitclaim in which my father would be dropped from the mortgage.
Doesn't a quitclaim deed carry no warranty? Does anyone have experience with a situation like this? What are some other alternatives?
Rental Property Investor · Jupiter, FL · Member since 2013 · 48 posts · 18 votes
9y
If your father cosigns on a mortgage, he is on the hook until the mortgage company releases him. He can convey his interest in the property to you through a quitclaim deed but he would still be liable for the mortgage.
My guess is that you would have to refinance at a later date, when your income is more established, to remove your dad from the situation.
Also, yes a Quitclaim has no warranty. However, I assume that a Warranty Deed would be executed that included both you and your dad as grantees. That would be the interest that he is Quitclaiming. The warranty that was conveyed to you in that Warranty Deed would still exist.