Saturday’s show was all about our listeners. We wanted to get back to and answer a lot of questions we’ve had recently. Focusing on cosigners, since that seems to be an area of confusion, we brought in Mona Edick from Prime Lending to help us clarify.
Today’s market is doing well and now is certainly the time to buy. As Mona mentioned during the show, mortgage payments are low in many areas when compared to monthly rental rates. More and more young people, fresh out of college, are looking to buy and use FHA government loans to finance their first home. However, they are in debt with their student loans and don’t qualify for a home loan, so they are in need of a cosigner.
Cosigning is common and often confusion arises when something changes with the property; such as selling or unfortunately losing it to foreclosure. To clarify, cosigning doesn’t mean you’re entitled to ownership of that property – and therefore don’t have any right to tell the owner when they can sell. So you are liable for the loan but don’t have any rights – so be careful who you co-sign with, or require some ownership or governing rights.  In addition, as Mona said, it’s a fairly simple process to assume your cosigner off the loan once you’ve established some credit.
We had many call in questions throughout the show and focused the remainder of the hour on answering them. Since housing prices have gone up in the last year, one caller was concerned about foreclosures because they are rising too fast. I agree the market as good, and as I’ve mentioned, now’s the time to buy. However, the options are somewhat slim and because of this, one property can get multiple offers with rising prices. For example, I had one property that had many competitive offers including one $40,000 over the asking price and they didn’t get he property!
This led us into a broader discussion of how appraisals work and how to determine the asking price. There are three kinds of appraisals; full, drive by, and no appraisal, with different fees associated with each. One caller asked if she could forgo the appraisal since they just refinanced the previous year. This is a possibility. Mona mentioned automated underwriting determines this based on the area and your financial situation. When trying to decide if you’ll need an appraisal or what kind it would be, your lender will look at your file and will use this system to decide how you’ll figure out the value of your property.
It was a great show getting to hear from so many listeners and we look forward to more interaction with you guys next time!
– Chris Rooney