Options for buying a home for student while going to college.
-FHA loan with 3.5% down required, normal interest rate. Student is primary borrower, parents are co-borrowers. Student does not have to have a job, but they must have a credit score of 640 or above (that’s the catch). It’s a great tool to get into the house with little investment and great for building the students credit while they are in school.
-2nd Home, Conventional with 10% down required, normal interest rate. If the parents do not want to put the home in the students name, and if the parents do not live within commuting distance, and if the parents will be occupying the home part of the year, then they can buy the home as a second home.
-Investment Property, Conventional, 20% down required, higher interest rate. The last option is the parents buying the home in their name as investment property. No kid on loan, parents get to write off on tax returns as rental property.
The above information was provided to me by Lacie Walton with Peoples Bank:
Senior Vice President Mortgage Lending
NMLS# 469782/ Peoples NMLS# 514404
Phone: (806) 687-7245 Direct: (806) 776-2088 Cell: (806) 441-8036
Fax: (806) 771-2268
Address: 5820 82nd Street, Lubbock, TX 79424