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Wednesday, January 5, 2022
Can a Son Use My Credit Score to Buy a Home?
By Gary M. Singer
RE Q&A: A mother wants to share title for one year and sign the home over to him because she has a stronger credit score. Is there a downside?
FORT LAUDERDALE, Fla. – Question: What are the pitfalls for a mother to use her credit to buy a house for her thirty-something son in another state? Both of our names would be on the title. He would make the down payment and make the mortgage payments. After a year, how would I remove my name? – Peggy
Answer: As a parent myself, I understand the urge to help your child.
This is a common scenario I see in my law practice, and sometimes it works out fine. That said, it often turns into a disaster for the family member.
Your credit is yours and not something to use for someone else. If your son cannot qualify for a loan, there is a good chance he cannot afford the payments or has a history of not paying his bills. You will be on the hook if your son does not pay the mortgage.
Because both of your names are on the title, you would be unable to sell the home to pay off the mortgage without his consent.
You could also be liable if someone gets hurt at the property. The injured person would sue all property owners to recover for their damages.
While you can remove your name from the property’s title, you cannot take yourself off the mortgage loan even if you no longer own part of the home. You would then be in the unenviable position of personally owing money collateralized by the property you have no interest in or control over.
Finally, you must be truthful when applying for a mortgage. You will need to inform the lender that you are not paying the deposit or making the monthly payments. A lender probably will not want to make a loan in this circumstance, but not being truthful when applying for credit is a crime.
If you still want to go through with this, you should speak with a local attorney to properly structure the transaction to minimize the pitfalls.