Wednesday, January 19, 2022
Good Friends
Posted By Babs De Lay on January 19, 2022, 4:00 AM
Did you wait too long to buy a home or condo? Have prices gone too high to even think you could buy something? Have no fear, ownership can happen ... with friends and family!
Eons ago, bankers wouldn't let women get a mortgage. It wasn't until the mid-1970s that a woman could access a line of credit independently without a man to cosign with her—for reals. Nowadays, you can buy a property with anyone, from a family member, coworker or friend.
I'm always surprised when people ask me if they can buy with someone they aren't married to, but then I must remind myself that folks don't buy and sell homes very often. So, here's how you can own this year with another person or persons:
1. Get pre-approved for a mortgage. It doesn't cost anything and gives you an idea of how much house you can buy on your own. The lender will check your credit, ask about income and bills, and give you a pretty good guesstimate as to the amount of mortgage you could get. For home loans, I recommend mortgage brokers instead of banks, since brokers have been selling mortgages for virtually their whole lives. Banks, by comparison, don't pay well and that banker might not be there in two years when you need counseling about refinancing (see: bottom of opposite page, ad for Julie Brizzee).
2. Figure out who could cosign on a mortgage with you and have them also get pre-approved for the mortgage. They too must have good credit and job history. However, if they are retired, the lender can't discriminate against them because their income is merely social security benefits each month. If three of you are going to college and want to buy something to live in instead of a dorm, you will come out with enough money when you graduate and sell it to make a dent in those student loans!
3. If one of you has $50,000 to put down toward the mortgage and the other buyer doesn't—but will pay half the mortgage payment each month—have the title company put a $50,000 lien on the property as soon as the mortgage is recorded. That way the property can never be sold without that $50,000 being paid back to you (with interest).
4. You may want to own as joint tenants or tenants in common. In joint tenancy, if either party dies the property goes to the surviving owner. In tenants in common, if either party dies the property goes to the deceased family or as directed in a will.
Buying a property is usually the biggest decision in your life. Make sure to deep dive into the facts before signing the closing papers on a purchase. I only get 500 words to explain this here, but know that lenders can't discriminate against you because you're not married to the other buyer(s). They also can't discriminate against you due to your race, color, religion, national origin, sex, marital status, age or whether you receive income from a public assistance program.
About The Author
Babs De Lay
A full-time broker/owner of Urban Utah Homes and Estates, Babs De Lay serves on the Salt Lake City Historic Landmark Commission. A writer and golfer, you'll find them working as a staff guardian at the Temple at Burning Man each year.
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