Anonymous
Anonymous asked in Business & FinanceRenting & Real Estate · 6 months ago

Would being on the mortgage impede my ability to purchase a condo later?

I am buying a townhouse with my elderly father, we will both be on the house as "Joint tenants of survivorship" which means whoever doesnt die first, owns the house completely. I have a choice whether or not I want to be on the mortgage.

My question is, if I am put on the mortgage, will that impede my ability to quality for a loan in 4 years when I buy my own condo? I will have 40k down on the condo, but still owe half of it. I am worried they will not allow me to get the loan for that mortgage if I am already on the first mortgage with my dad at the townhome.

My dad said this isnt true, that I could use the townhome as collateral to get the mortgage loan for the condo. Is this true?

Update:

I am in the United States

16 Answers

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  • 6 months ago

    If you are on the NOTE, (responsible for payment) then it will be counted against you in the debt to income ratio if you try to buy.

    Source(s): Mortgage lender 33 years.
  • 6 months ago

    Yes, it would. You'd need income to support both loans.

  • 6 months ago

    Different angle: Have you considered your father being sole owner so that if he dies first you inherit the condo at its stepped up basis ?? {You can GIFT your father money if he needs a down payment. << idk cost, or if you have siblings, etc which can impact your life. We also do not know your credit score, or your income.}

    Source(s): Taxes, always taxes ...
    • SumDude
      Lv 7
      6 months agoReport

      Most state inheritance taxes are high enough to allow a condo, other assets, and cash to flow through untaxed. Inheritance tax (if any) might be less than the gain on the sale of the condo if the basis is the original purchase price.

  • 6 months ago

    Being 'put on the mortgage' means that you share full financial responsibility for repaying that debt. It will absolutely be counted when you go to buy something else that requires financing. Whether or not it will disqualify you at that later time is not something ANYONE can answer now. Just know that it will count and that your father is incorrect about that part of it. He is also incorrect that you can use the townhome as collateral for the condo. The condo is the collateral for the condo; don't pay and the bank forecloses on the condo. The lender on the condo would never accept as collateral an asset with an existing debt obligation against it. They would be in second position to the lender for that mortgage and that does them no good.

    If the townhome had no mortgage, you could use any rental income from the townhome to help you qualify for the condo loan, but with $40k down, you wouldn't need it.

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  • 6 months ago

    Your father is right. Further, if he dies first, the loan could be called due, which means that you would have to pay it off in full immediately, or face foreclosure. Many loans are written that way.

  • 6 months ago

    if your income supports both, you can have both with a mortgage

    the babbling about note v mortgage is nonsense

    no the loan what be called due when the owner dies, by law in the US, a close relative heir can assume a mortgage

  • 6 months ago

    Yes, having another mortgage will impede your ability to get a new mortgage so in that regard you are correct. Having the first mortgage and paying it on time will, however, improve your credit, and if you have the income to afford both mortgage it won't really matter, but being on the mortgage will impede you getting a new mortgage - you are correct about that.

  • 6 months ago

    i would hope not as long as youre rnaking all the payrnents on tirne

  • A.J.
    Lv 7
    6 months ago

    If you are obligated legally by the mortgage on the townhouse, it counts as your debt and mortgage payments.

    As joint tenant owner of the townhouse, regardless of mortgage, if your father approves it, it can be used as 2nd mortgage additional collateral.

    If responsible for the townhouse mortgage, and payments are always on time, it improves your credit score.

    The questions not answered are how much equity is in the townhouse, can your father qualify for it without your income, is 40K a 50% equity on the condo price as you are stating, what is your income, and what credit score do you have now?

    We don't know interest rates in 4 years, but half down is easy qualification if your income covers it.

    • LILL
      Lv 7
      6 months agoReport

      Google the differces between a mortgage and a note.

  • Never
    Lv 7
    6 months ago

    yes. unless its nearly paid off.

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