I want to help my parents buy a house and I want to buy a house this year as well. In order not to pay higher interest rate because one would be an income property, the Mortgage Broker suggests we buy them at the same time with different banks. What would be the consequences of doing this? Would it be possible to still get the $8000 First time home buyer tax credit?
My parents have at least 20% to put down for down payment and their house would be larger & more expensive.
Golfer is right, and I will add this. If for some reason you can pull off this fraud temporarily, when you are found out, and you will be eventually, both lenders could call the notes due in 30 days, meaning you will have 30 days to pay off the mortgages or face stiff financial penalties.
The mortgage broker you are working with is a shyster and giving you bad advice. I strongly suggest you find an ethical broker to do business with.
May 20th, 2009 at 8:37 am
Your mortgage broker is an idiot who is just hoping to collect double fees.
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May 20th, 2009 at 8:39 am
The consequences is mainly in regards to the second house. Obviously,is you name is on both houses, you will only qualify for the $8000 for one house. Second, banks require a MUCH higher down payment amount for a second house. Third, you usually get a higher interest rate on the second house as well.
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May 20th, 2009 at 8:43 am
is he saying for you to make both of these appear to be owner occupied? that is fraud. If found out then you and he could face some prison time. No buy your home first and then buy the investment property for your parents if your budget can afford both. See the investment home for your parents even if they pay rent to you the rents cannot off set the payment unless you put more than 30% down in any event.
Now if declaring these purchases properly you can close on both the same day no problem. That will not have any effect on the first time home buyers tax credit at all
I am a mortgage banker in TN
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May 20th, 2009 at 9:44 am
Golfer is right, and I will add this. If for some reason you can pull off this fraud temporarily, when you are found out, and you will be eventually, both lenders could call the notes due in 30 days, meaning you will have 30 days to pay off the mortgages or face stiff financial penalties.
The mortgage broker you are working with is a shyster and giving you bad advice. I strongly suggest you find an ethical broker to do business with.
References :
Oregon Realtor