For example, a house costs £200K. Person 1 gets a mortgage for £90K. Person 2 gets a mortgage for £110K. They pool together these two mortgages to pay the total £200K for the one house. Is this a viable option or do banks insist that only one mortgage can be valid on any one house?
2006-10-23 10:36:08 · 11 answers · asked by werdsmyth_2000 2 in Business & Finance ➔ Renting & Real Estate
Sorry but it can not be done that away. What you would do is a 80/20 mortgage or however you choose to do it. But, lenders want to be in the First Lien Position, with the lesser amount mortgage being in 2nd lien position. Why would you do this anyway, unless you can not qualify for the first montgage. You can do a co-applicant on the loan application, and get a 100 percent loan. With the 100 percent loan you will have MI insurance on anything over 80 percent of the loan amount. Unless you add a .25 to .50 to the rate to not have MI insurance. That is if you go conforming. If you go sub-prime you will not have MI insurance on your loan.
Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
Try to find someone (broker) that will pull your credit one time, and submit your loan application to company's that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.
2006-10-23 17:33:36 · answer #1 · answered by W. E 5 · 0⤊ 0⤋
This is not a viable way to buy a house. Typically, if there's going to be two mortgages to buy the house, the 1st is for 80% of the home's value and the 2nd is for 20% of the value. Both of these mortgages are closed at the same time, with the same borrower(s).
You could pay all cash for the home, then refinance it into the two mortgages you mention above. That's the only way I can see it getting done.
2006-10-23 10:54:04 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No, it can't be done. If the property is registered in both names then the lender will need both of you to sign the mortgage document.
Regardless, mortgages take priority based on when they are registered on title and two mortgages can't be registered at the same time. Accordingly, one mortgage would be a first mortgage and the other would be a second or equity mortgage.
In short, you can have two mortgages or even ten, for that matter, on one property but all title holders have to sign each mortgage.
2006-10-23 10:50:15 · answer #3 · answered by Jack 6 · 0⤊ 0⤋
You can have two mortgages-- but here's the problem. Only ONE can be in 'first position"- they get paid first if you default. The second gets the 'leftoveres." you could get a really low interest rate on the first and one that is 50% higher on the second for this very reason.
You can apply for the mortgage together, though. You'd be just as screwed if the other person defaulted on their seperate mortgage-- becuase they would try and foreclose on your house-- so there's no reason to do the seperate thing.
2006-10-23 12:06:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
No, you would have to go in on the mortgage as co-applicants. You could get a first mortgage, if it were enough to purchase the house fully, then get a second mortgage on the equity in the home. The bank will give you a loan on the house in exchange for the house as collatoral. Two banks cannot have collatoral on 1 house unless the equity is there.
2006-10-23 10:40:40 · answer #5 · answered by nonametomention 3 · 0⤊ 0⤋
The mortgage on the rental property will be a commercial mortgage, not the same as a residential mortgage, which is only available for the property you actually live in. Therefore, you will need at least 30-35% cash down, plus closing costs, plus reserves. You will need 3 years of actual financials from the current owner, plus your pro forma projections for the coming 3 years. You are very likely to be limited to 15 year term. And the interest rate is considerably higher than for owner-occupied residential mortgages. Remember rents are dropping in many areas of the country and vacancies are rising. It seems that while many people are losing their homes to foreclosure, they cannot afford to rent either! People are doubling and tripling up with other family members - oodles of "bounce-back kids," adults who have been independent for years (or away in college) moving back in with mom & dad. You will need to do your projections with a 10% vacancy rate, more if vacancy rates are rising in your market. With a glut of housing and rental properties on the market, and rising vacancy rates, it will be very tough to get a commercial mortgage. Now if you were going to be moving into another house and keeping the old one with its existing mortgage as a rental property, you might have a better chance of getting a residential mortgage, if you have at least 20% down, a very secure job(s), all closing costs, and 3 - 6 months of reserves. They will discount the income from renting your existing home, but it still will boost your income in the mortgage calculations.
2016-05-22 02:10:45 · answer #6 · answered by Ann 4 · 0⤊ 0⤋
i work at a mortgage company. and i do not believe you can do that. you can put both people on a mortgage and have 1st and 2nd mortgage. The first would be 200 and the second 110. It wouldnt make sense to get two seperate mortgages, plus you can not have two first mortgages on the same home. you would have to have a first and second
2006-10-23 10:43:00 · answer #7 · answered by Anonymous · 0⤊ 0⤋
I doubt it - the mortgage is a charge over the house itself, so if you default, the bank can take the house. Not possible to do this when someone else has a charge on the property as well
2006-10-23 10:41:06 · answer #8 · answered by bw_r005t3r 2 · 0⤊ 0⤋
There is nothing wrong with doing this. People do it in expensive cities in the US all the time. It is called Joint Tenancy and each person retains ownership of a portion of the house. You should consult an attorney that specializes in real estate transactions to help you.
2006-10-23 10:41:33 · answer #9 · answered by Alan B 2 · 1⤊ 1⤋
read tips on real estate , loans and mortgages to help you on this site
2006-10-23 10:57:23 · answer #10 · answered by lushy 3 · 0⤊ 0⤋