Trying to understand whether this house/mortgage situation sounds normal or unusual.
Trying to understand whether this house/mortgage situation sounds normal or unusual.
A couple bought a house together and one side of the family contributed a large amount of money toward the purchase so the couple could get started and move into the home. The other side of the family did not contribute the down payment money, but a parent became involved in the mortgage process to help the couple qualify financially.
At first, everything seemed very close to being finalized. There was already a locked interest rate, attorneys involved, underwriting happening, employment checks completed, lender paperwork constantly coming through, and even a planned move-in date. It did not seem like a mortgage that was falling apart or about to be denied.
The understanding at the time was that the parent was helping temporarily so the loan could get approved, basically acting as a co-signer/co-borrower.
Then suddenly the original mortgage application seems to have been dropped and replaced with a completely different loan application through another lender or loan setup.
What’s confusing is that the explanations for why this happened have changed over time. Sometimes it was explained as seller delays. Other times it was supposedly to get a better interest rate. Then later, debt-to-income issues connected to a car loan were brought up as part of the explanation.
But the timeline does not fully make sense. The car loan issue definitely became a real source of stress, but that happened during the second mortgage application process, almost a month after the second application had already already started. So it is hard to understand how that issue could explain why the original mortgage application changed in the first place.
Then came the ownership issue.
When the house finally closed, the deed ended up making the parent and child equal co-owners of the property. That came as a surprise because the understanding throughout the process had been that the parent was only temporarily helping the couple qualify for the mortgage, not becoming a permanent owner of half the house.
Meanwhile, the side of the family that contributed the money toward the purchase apparently ended up with no ownership interest or protection at all. They are not on the deed and legally it almost feels like their financial contribution never even existed, despite helping make the purchase possible.
That same side of the family is also still helping make mortgage payments. But in the second mortgage application, those contributed funds apparently were not formally listed as gifts, and the family members who contributed the money say they never signed gift letters.
There was also concern raised early on about protecting the financial interest of the family contributing the money. One partner repeatedly asked about being added to the deed and was told it could not happen because of “credit issues.” But later it became clear their credit may never actually have been pulled during the mortgage process at all.
Does this sound like a fairly normal mortgage restructuring/miscommunication situation? Or does this sound more unusual than people are making it seem?