Can You Get a Home Loan from Your Parents? Financial Aid Rules
Cori Carl found it difficult to get a home loan from a bank in 2011, partly because she worked as a freelance marketing consultant and banks weren’t too generous with loans to freelancers, who typically have an unsteady income.
Carl, then 26, was ready to buy a co-op apartment in Brooklyn, and thought she was in a good position to qualify for a mortgage from a bank. She had a large down payment, great credit, a steady income and long-term clients, she says. She was still turned down.
With a $60,000 down payment in hand for a $235,000 apartment she wanted to buy, Carl turned to her mother for a $175,000 private mortgage with her mom acting as the bank. Her mom had the money sitting in her checking account from a land sale she recently completed, and agreed to the loan at the then-market interest rate of 3.75 percent for 25 years in a fixed-rate loan. […]