Condominiums For Kids
Why is this girl so happy?
She just chose the colors for her kitchen and dining rooms in her new apartment. (As I mention in my new book, one of the advantages of owning versus renting is that you don’t have to ask the landlord to paint the walls pink.)
For many young people who want to purchase a condo–their first home–there is the perception that the lack of credit history and/or lower scores, insufficent assets for downpayment, lower income, and a short period of employment will prevent them from buying a home. Usually this is not true.
There are many programs for young buyers with any or all of these risk factors. Surprisingly, most borrowers find that they do qualify for loans. For some people, though, they need help, and there are programs–usually called “kiddie condo” programs–where a close relative, usually a parent or parents, co-sign the loan and help the “kiddie” qualify.
The main downside for the parents is that they too are responsible for the payment, and so if there is a late mortgage payment, this will be reflected on all credit reports. Also, the only way for the parents to get removed from this obligation is for the child to refinance the loan without the parents on the loan. Overall, this is a fabulous way for a young homeowner to start their life-long dreams of home ownership.
The loan officer should present these programs and explain how they will be structured, detailing the pros and cons, just as they would with any other loan.
Did I say paint the walls pink?
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