Some lenders—but not all—will allow adult children to co-sign for their parents on jumbo loans. It might help keep grandma and grandpa closer to the grandkids.
The Wall Street Journal | February 24, 2016 After years of getting help from mom and dad, some adult children are returning the favor and buying their parents a house.
Mortgage specialist Ray Rodriguez cites a recent example in which a couple living in Manhattan cosigned on a jumbo mortgage for the wife’s parents to purchase an approximately $1.5 million condo in Queens.
The parents worked in the restaurant business and could not document a regular income, says Mr. Rodriguez, mortgage sales manager for Cherry Hill, N.J.-based TD Bank. Their daughter and her husband had sufficient income from their professional jobs to qualify for the mortgage. So they got a loan with the home classified as an investment property, and the parents now pay monthly rent.
When permitted, all co-borrowers must meet minimum credit score guidelines, but the incomes and assets of all borrowers can be pooled. Lenders typically still require that the occupying owner qualify to make the payments based on his or her own income, so the down payment should be sufficient to reduce the loan amount to a qualifying level, Mr. Walsh says. Read more here.