Non-Occupying Co-Borrower

[Jill Graff]

Has anyone heard of a non-occupying co-borrower? This is a twist on the parents/kids buy house. Here the kid has better numbers for a lower interest loan. Parents are going to make the down payment and pay the kid the mortgage amount monthly. Parents are over 65 so they are trying to get the lower real estate tax exemption.

Is there a downside to this? It is usually the flaky kids who have trouble getting the loan!

Thanks in advance.

[taxea]

It would be better if they pay the mortgage directly as this gives document proving they can take the interest deduction. Same goes for property tax. Son should ask the mortgage company to issue the 1098 using parents SSN.

[Burke]

Has anyone heard of a non-occupying co-borrower? This is a twist on the parents/kids buy house. Here the kid has better numbers for a lower interest loan. Parents are going to make the down payment and pay the kid the mortgage amount monthly. Parents are over 65 so they are trying to get the lower real estate tax exemption. Is there a downside to this? It is usually the flaky kids who have trouble getting the loan!

I am a little vague on what you are asking. Is this arrangement for the bank to issue a mortgage at a lower rate? Or to qualify for some "real estate exemption" in Texas? Unfamiliar with that. Sounds like kids want to buy home as a co-owner with parents. So kids get loan and parents co-sign note? Then parents pay the mortgage? If parents are not co-owners of house, I don't see how they can deduct the real estate taxes.

[americantax]

Has anyone heard of a non-occupying co-borrower? This is a twist on the parents/kids buy house. Here the kid has better numbers for a lower interest loan. Parents are going to make the down payment and pay the kid the mortgage amount monthly. Parents are over 65 so they are trying to get the lower real estate tax exemption.

Is there a downside to this? It is usually the flaky kids who have trouble getting the loan!

Thanks in advance.

Yes, a non-occupying co-borrower is normal standard way that someone can help family members qualify for a loan. This is typically used for FHA borrowers, as far as the real estate tax exemption I don't think they will qualify because they will not live at the property. If you have additional questions call me on my cell phone 312-404-8957 I hope this made sense.