As a first time home buyer, I want to buy a house for my parents before I purchase my own. The idea would be to pay 20% down and parents would pay the mortgage. I could then close on an FHA mortgage paying 3.5% down. Would I benefit from having the first house in my name in order to close the second deal? In other words, from a lender's perspective is it better to have the collateral or would lenders see it as too risky if my income could not cover 2 homes if something were to happen?
@Ted Seely You can buy are house for your parents a few different ways:
* Gift the down payment and the mortgage is in their name (assuming they have income - job, retirement, social security, etc.). The down payment can be as little as 3%. In this scenario there is no impact to your DTI for when you buy your place.
* Be a co-borrower to help them qualify for a mortgage. In this scenario you need to be able to carry both the loan on your income. So it will impact your DTI.
* Buy a multifamily (2-4) property, and have them live in one of the units.
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