Can You Be a "Daydream Believer" & Buy a Chicagoland Home?

Can You Be a "Daydream Believer"

& Buy a Chicagoland Home?

Do you dream of owning a home?

If so, you're not alone.  Home ownership has been an integral part of the "American Dream" ... some say the defining portion ... for a long long time.  

The term "American Dream" was first coined by historian James Truslow Adams back in 1931 in his book "The Epic of America".  Adams wrote in that book, "The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement."

But the "American Dream" has taken a bit of a hit as of late ... and is now deemed unattainable by many younger potential home buyers.  In a new report conducted by search site Apartment List, it was found that "80% of millennials in Chicago want to buy a home, but 70% are waiting because they can't afford one."  

Is that really true though?  Do home buying options exist, that when implemented, could assist young Chicagoans dreaming of home buying?  Help solve their downpayment woes?  Help them qualify for a mortgage sooner than they think possible?

The short answer to those questions is "yes" ... but as typical with mortgages and financing, there are criteria that must be met in order to flex those home financing muscles ...

There's one option for financing that's often overlooked by young buyers when considering financing.  It can help them home buyers purchase a home sooner than they dreamed.  

Consider this scenario:  There's a son/daughter hoping to buy a home somewhere in the Chicago/Chicagoland area. They've been trying to save a down payment for their home purchase, but it's going slowly.  

What they've discovered when doing some preliminary research on the area's housing is that a mixture of positives and negatives currently exist in many Chicagoland housing markets:  

     Some negatives for Chicagoland Buyers:

• Housing prices in many Chicagoland housing markets are rising 
• There is a shortage of homes currently available for sale in most Chicagoland housing markets  
• Home buyers face competition from other buyers when they bid on a home 

     Some positives for Chicagoland Buyers:  

• Housing prices are rising more slowly than in other areas of the U.S. 
• The average time for a home to remain on the market is down ... meaning Sellers are motivated to sell and price their homes correctly

These mixed signs for housing have them a bit confused and disheartened.  They realize they can't save a down payment as quickly as home prices are rising, even at the slower current rate.  

Is there still some way for them to buy a home?  Do options exist for home buyers with small/no down payment or limited financial resources? 

Again, the answer is yes ... and one way to successfully accomplish this is to consider having a Non-Occupying Borrower co-signing with them on their loan.

What is a Non-Occupying Borrower?  They're a mortgage applicant on a residential property transaction that:

• Will not occupy the Subject Property being financed
• Will have joint liability for the Note with the Borrower(s)
• Will sign the Mortgage along with the Borrower
• Can assist with a down payment  

Who can fulfill that role?  

• The Non-Occupying Borrower must be related to you by blood, marriage or law ... i.e. a Father/Mother, Grandfather/Grandmother, Uncle/Aunt, Brother/Sister.

The responsibilities of a Non-Occupying Borrower are:  They agree to co-sign and be on the loan, knowing that they will be equally obligated for the loan and its repayment.  They also understand that the monthly debt/obligation of that loan will also be counted as their debt, should they ever seek financing for their own home, a car, or other credit.

Depending on the type of loan in play: There are varying effects resulting from the use of Non-Occupying Borrowers.  FHA, Conventional Loans allow this type of co-borrower.  VA does not (in MOST cases).

In most cases:  A Non-Occupying Borrower is essentially treated the same as the primary or Occupying Borrower.  A Non-Occupying Borrower must qualify from a credit standpoint.  They must also meet the same employment and income requirements as the Occupying Borrower.

The Non-Occupying Borrower's debt is considered during the qualifying process for financing, just as though they were going to live in the home.  In fact, the only real difference between Co-Signer/Non-Occupying Borrower and primary/Occupying Borrower is that of residency and the fact that they will not live in the home financed.

It's parents that most often decide to help out in this manner.  They offer to be Co-Borrowers with sons or daughters who lack sufficient income to qualify for a loan on their own.  

Other scenarios seen utilizing Non-Occupying Borrowers are:  

• A primary Occupying Borrower is buying a higher-priced home than what they alone qualify for (Debt-to-Income qualifying ratios (DTI) are insufficient to qualify).   
• Home Buyers that are still attending college.  This is a buying scenario that is gaining in popularity. 

If interested in gaining more info regarding this financing option, how it can help you buy, or considering the use of a Co-Borrower or Non-Occupying Borrower financing scenario to buy anywhere in the Chicagoland area ... let's talk. 

This type of purchase and financing can be used to offset and leverage the cost of housing's rising prices and the difficulties of savings a large down payment.  Utilizing the buying power of Non-Occupying Borrowers can help you become a homeowner sooner ... or when it might not have been possible otherwise.

Turn your dream into a plan ... contact me today!

Also helpful:  Considering Helping Your Child Buy a Home in Will County or Chicagoland? What Parents and/or Co-Signors Need to Know

And:  The ABC's of FHA Loans     

* In need of financing and credit answers? Looking to see what home buying or refinancing options exist for you in New Lenox, Will County, or elsewhere in the Chicagoland area? Contact me! I'll put my 40 years of Mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Originator - nmls #216987 - IL Lic. 031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

nmls #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

www.genemundt.com

gmundt@goapmc.com

 

              

       

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking: 

Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the 

greater Chicagoland region, including: 

The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, 

Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, 

Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, 

and elsewhere within IL & WI.

Your Referrals are Always Appreciated and Welcomed!