Episode 72, Part 2: The Double Up Mortgage
We all know it can be hard to afford a home in the expensive Austin market right now, so why not buy a home with a friend and save on rent? Listen in to hear more about the Double Up Mortgage and why you may want to give it a try.
"It's really almost no different than buying a home as a married couple," Loan Officer Andrew Thurston says.
"We review the credit, income, and assets the same as we would with any couple, and there's almost no negative with it," John Schutze says, though fellow loan officer Kristi Rendon reminded us that it is much more serious to be getting a mortgage with a friend than it is to just sign an apartment lease - though legal agreements could be drawn up to help, if necessary.
"However, people in the millennial age range don't usually consider buying a house with their friend - and it's a great kickstart to start earning equity so when they do leave that house, they can create a nest egg for their next home," Kristi says.
Loan programs such as Fannie Mae's Home Ready Program are also available, which allow you to count income from your roommate to qualify for the property - without them having to sign the mortgage.
KEY FEATURES OF THE HOME READY PROGRAM:
Low down payment: Up to 97% LTV financing for home purchases.
Flexible sources of funds:
- Can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit properties).
- Income from non-borrower household members considered as a compensating factor in Desktop Underwriter® (DU®) to allow for a debt-toincome (DTI) ratio >45%, up to 50%.
- Rental unit and boarder income.
- Non-occupant borrowers, such as a parent.
- Borrower is NOT required to be a first-time buyer.
- Gifts, grants, Community Seconds®, and cash-on-hand permitted as a source of funds for down payment and closing costs.
Affordable and cancellable monthly MI: Reduced MI coverage requirement above 90% LTV; cancellable MI per Servicing Guide policy.
Homeownership course: The online Framework® course prepares borrowers for sustainable homeownership; other education and advising options are available.
Nontraditional credit is allowed: Supports manufactured housing up to 95% and HomeStyle® Renovation (approved lenders) up to 95%
If you are now considering purchasing a home with a friend or significant other, please feel free to contact John, Andrew, or Kristi or call (512) 524-8310 to learn more about how we can help!