Q: I need to buy a new home for me and my family. However, I had co-signed on a house for my mom, just before I got married. I’ve been told that I need a down payment that I have no way of accumulating any time soon, since I’m the only one working. I never benefited from the first-time homebuyer program, since that was not offered to us at the time. Is there any chance that I could benefit from that now, eight years later? If not, any chance that I may need less down payment for a family of six?
A: First, you may have trouble even qualifying for a home large enough for your family of six, because you are already obligated on another mortgage. This is why I strongly discourage people from co-signing. Legally, it’s as if you have a mortgage already. You are equally responsible for the mortgage you co-signed for your mother. I would suggest you see if your mother can refinance and get you off that mortgage.
But, in this market, she may not be able to refinance.
At the same time, you should contact a Housing and Urban Development (HUD)-approved housing counseling organization in your area. This federal agency sponsors these organizations throughout the country that can provide advice on buying a home. Click here to help locate one in your local area, or call HUD’s interactive voice system at (800) 569-4287. For example, when I searched the list for your area, I found the Miami Beach Community Development Corp. It has a first-time homebuyer assistance program that provides training, counseling and financing to assist qualified homebuyers in the purchase of property to be used as their principle residence.
You will find, for the most part, that the first-time buyer programs have income limits. Contact a housing agency to see if you qualify. The agency can also help you determine if you might qualify for a loan despite having co-signed. Additionally, many of the programs will provide down payment assistance.
But, even if you can find a program where you don’t need a down payment or where you may only need a small one, you still need to try and save before you buy a home. As the sole earner in the household, you need a cash cushion.
I recommend you take some home buying classes, which will help you prepare to finally be a homeowner. And, despite your obstacles, with the proper education and savings, it’s not too late to realize the American dream of homeownership.