Mortgage Options...need to buy 2 single family homes

[canipleasegetabove750]

I'm hoping someone with experience on this can chime in. My hubby and I are looking to buy 2 single family homes. One is for us and one is for my mom in law. We want to be able to buy two houses close to each other so we can keep an eye on her as she gets older. My only problem, I don't know how to plan for this. Ours would be owner occupied but she would live in the other. I can't do one as a vacation home, as I don't want her to be 50 miles from our home. It wouldn't be an investment as we aren't making her pay rent. Does anyone know if there are any options available for buying a home for your parent? This is something we are looking at in the next 6 months or so. We have the income and our dti is in line to qualify for two homes, just not sure if anyone has programs available for this. Has anyone gone this route, what did you do or suggest? Thanks for any input.

[Brian B The Loan Professor]

Unless your mother in law were to be on the loan it would be an investment property - rental income is not a determining factor.

It is occupancy - they know you will make the payment on the home you live in first putting the second home at a higher risk.

If your MIL can be on the loan and you can be a non occupant coborrower the options are a little better.

If not you will need a conventional investment loan which will require 20% minimum down.

 

Your own home wont be an issue since it will be owner occupied you can use fha with only 3.5% down or conventional starting at 5% down.

 

B

[canipleasegetabove750]

Brian,

 

Thanks for the reply. Do you know how that would work as far as an estate issue for her? She didn't want to be on the loan, as she didn't want anyone to try and take the house from my hubby. Essentially, it would be our home and we would be paying the mortgage. if my mil and hubby were on the title, would the home go into her estate if anything happened to her? She already has a will that states everything goes to the hubby, would she just change her will to include the house. Or does it work like a spouse. I know that if a married couple have a home and something happens, it automatically goes to the spouse. if something were to happen to her, would it automatically go to the other person on the contract? also, if we could be a non occupant co-borrower, are the options the same as the fha? So essentially she could do fha and have my hubby as the coborrower?

 

Thanks for all your help

[Brian B The Loan Professor]

I cant comment on the estate aspect it isnt something out of my realm. The loan would work like you said she would be the borrower he would be Non Occupant Coborrower. FHA would probably be the easiest. That would mean you would need to go Conventional for your loan since you can only have one fha loan. When someone dies on title/note the other people are responsible for continuing so it basically would fall into his control however I dont know the estate part to know for sure if it would require more to get her name of of the title.

B

[canipleasegetabove750]

thanks brian....one more question. we live in az....could we each (hubby and I) have a separate fha loan? I am just wondering if we are allowed to separately purchase a home each, or does fha require both spouses on a loan? we are also in a usda approved rural area, however, I don't think we could do usda separate loans either.....i don't want to do anything illegal or not above board.....this is why i'm asking. the funny thing is i work in the new home building industry....but absolutely no mortgage/financing experience. thanks again for your help

[Brian B The Loan Professor]

No you probably couldnt get away with seperate fha loans - USDA has a rule about only owning one property so that rules that out - you will be limited on how you can do this. But if everything is as needed (credit/income/assetts) it can be done -

[namars]

I can only give my experience of how title is listed in my state but you would have the deed as Joint Tenants with Right of Survivorship not as

Tenants in Common. I would probably add it to the will also just to be safe.