I have a contract on one of the Homes I have For Sale in Birmingham Alabama. When the buyer made his offer, the lender had given him a pre-approval letter. He pays his bills on time and has a great credit score. He was really excited about buying his first home!!
We were supposed to close on the 19th, but with all the changes in the economy and underwriting practices, and the fact that FHA was changing its rules effective October 1st, we were told everything was backed up, so we moved our closing date to the 30th. Well, on the evening of the 29th we find out the buyer IS NOT approved. Why???? Seems the buyer has co-signed a note so his sister can buy a car.
Sister's credit is not good enough to buy her dream car so her brother co-signs for her. Now, that debt counts against the brother as if HE had made the loan on the car. He can not buy a house because he was helping his sister out.
Before you co-sign for ANYBODY, remember, the lender wants a co-signor because they don't believe the person will pay them back. If the other person doesn't make their payments, they are coming after YOU to make the payments so that payment counts as if it is yours on your credit report. It is great to be supportive of a family member, but it has to make sense for you.
If you are thinking about buying a home in Hoover, Alabama or the greater Birmingham area, sit down with a lender and look at your total financial picture. If they point out something in your credit or spending habits that looks like a problem, get it fixed immediately.
Everyone can own a home.
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