If you need additional income to qualify, another way to buy a home is to partner up with somebody. Are you living with a roommate now – why not own together? How about your college friends or co-workers? Is there somebody you really get along with that is responsible? Is your brother/sister renting in the same town? You lived together for many years up to this point, why not do it again and have a business investment together? Your good income with your partner’s good credit, or vice-versa, is the combination your are seeking. With the low interest rates and prices it is amazing how low monthly payments are … and the income needed to qualify for them. Check it out – you will be amazed at what you can buy.
Our youngest son recently closed escrow on a wonderful home with two friends. They put 3.5% down, got a new FHA loan and their total payment, including taxes and insurance, is just about equal to what they’d have to pay in rent! Plus … they will share the $8,000 first time homebuyer’s tax credit. Their anticipated holding period is 5-8 years, enough time to get done with schooling, and establish careers. What will the market do during that time? We think it will be kind to them and give them a good financial start in life with this initial real estate investment.
The mechanics are important when buying with a partner … be sure you get along. Not only is this a business venture, you will be living together. Select carefully. Determine in advance who will get the master bedroom, use of the garage, etc. Have a pet policy … cats, dogs okay? Snakes? Be sure you have a household account with reserves. Our son and friends set up a household bank account titled “Three Amigos”. That makes for easy record keeping and assurance that there will always be funds available when needed for a common expense.
It is important to memorialize your agreements in writing. A Memorandum of Understanding should include responsibilities, and how future decisions will be made. What if one of you wants out? What if one doesn’t make their share of the monthly payment? What is one gets married and another person is suddenly involved (hint - get a Quitclaim Deed). Do this in advance when everybody is getting along.
Our Advice: Understand, the statement “partnerships were made in Hades” is very true, but they can work well with the right preparation and circumstances. There are 100% loan programs available in some of our communities. You can buy with nothing down and get an $8,000 tax credit for doing it. These are the good old days. Look at your options … these and others.
While the present economic situation is causing heartache and pain for many … there are some silver linings to these dark clouds. This is a wonderful opportunity for young American entering the work force to partake in the American Dream. When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, 775-781- 5472. firstname.lastname@example.org, www.carsonvalleyland.com