- Wedding: September 2013 - B&B
My FI and I are doing this… but we (ok really HE) had several thousand dollars for the down payment. We were able to do this because #1) the housing market where we are buying is RIDIC. You can buy a decent house in town for $75k. I am not exaggerating! We also got an FHA loan, and our seller agreed to seller’s assist, because she REALLY wants to sell. So we only had to put like, 3% down because the seller was willing to receive 3% less from the bank to get the house sold fast. Another really important thing to note, is we are buying a triplex (three apartments in one) because we are buying for investement. We do plan to occupy one of the apartments in the meantime, but eventually we will move out and rent out all three. In doing this, in a sense, we are technically having someone else make our monthly mortgage payments (and part of the bills). As a PP mentioned, you will want to look for a place you want to live in for some time, as you mostly pay interest for awhile with your payments. We intend to keep this place and continue renting it out even after we do not live there. While we live there, we are in a position to save money for a down payment AND also help pay on the mortgage. So we will be making double mortgage payments and saving ourselves. This will help us be able to genuinely get some use out of the equity in a few years’ time.
We have run into SO many problems not being married, but also having just gotten new jobs. Most lenders are going to want to see at least 6 months of employment! My FI graduated in Dec with a degree in forestry, and in March started a job, in forestry. They don’t see it that way. They see it as, he went from part time in the restaurant industry to the forestry industry, and that to them is too unstable. I was saved only because I went from “fundraising” to “fundraising”.
Everyone’s situation is different but because we aren’t married, we ran into all kinds of trouble. For instance, because of his job situation, they won’t put him on the mortgage. Ok, fine. But since he’s not on the mortgage, and we aren’t married, they won’t count any of his income. We also had to prove we were engaged before they would even let him sign a piece of paper stating that money that had already been put INTO the joint account was mine to use, and we had to provide a paper trail of his deposits to show where they came from. Our insurance is going to be higher because even though I am listed as a secondary driver on his auto insurance (where we are also getting the home insurance), because we are not married and the mortgage is in my name, I cannot qualify to be part of his multiple policy discount. Until we get married. Just a couple of the problems we ran into.
Something I learned (the first time I thought this was all going to fall through) if you deposit money into a joint account for the home, like if you use wedding money, DO NOT just deposit cash. Give the cash to a parent or trusted relative and then have them write you a check and deposit that as well. Lenders are very suspicious of cash deposits and I have heard they sometimes won’t count them toward money for a down payment or closing costs!! And if you already have a joint account or plan on getting one, don’t move money around TOO much because you will have to show all those moves and transfers.
It is exciting and if it can truly be an investement, go for it!! But there is ALOT to take into consideration, much more than “I would rather pay on a mortgage than pay rent.” Good luck!!!!