Thoughts on this route to obtain mortgage...

[Anonymous]

DH and I are working on saving for our down payment but are realistically a year out. A house is for sale a few blocks away that would be ideal for our family at a great price. So, in lamenting on not being able to act we, this idea came to us...

We really would only need to use one of our incomes to qualify for this mortgage. So, theoretically he could get a loan for what we need without impacting my credit or DTI. Use that for DP. I get the mortgage in my name. The loan would likely be a rediculous interest rate but the amount we are putting into savings each month it could be paid off pretty quick.

Is this just a really silly idea?

[Anonymous]

Should also say...we don't qualify for DP assistance due to income and no family to ask.

[Anonymous]

Do you live in a community property state? If so, then both of your credit histories will be considered when applying for a mortgage.

https://www.legalzoom.com/articles/do-you-live-in-a-community-property-state

[Anonymous]

Nope, mortgage can be done by only one here.

[StartingOver10]

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@Anonymous wrote:
DH and I are working on saving for our down payment but are realistically a year out. A house is for sale a few blocks away that would be ideal for our family at a great price. So, in lamenting on not being able to act we, this idea came to us...

We really would only need to use one of our incomes to qualify for this mortgage. So, theoretically he could get a loan for what we need without impacting my credit or DTI. Use that for DP. I get the mortgage in my name. The loan would likely be a rediculous interest rate but the amount we are putting into savings each month it could be paid off pretty quick.

Is this just a really silly idea?

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So is the idea to buy the home down the street and pay it off and sell it to use the proceeds to buy your long term home? Or is it to buy this one and stay a while?  Either way, I think it is a good plan from the little bit you posted. Of course, there could be other unknown factors that change my answer! Getting a home at a great price in your current neighborhood sounds ideal. Nothing at all wrong with having one on the mortgage. Not a silly idea at all IMO. 

[Anonymous]

We would stay in the house for a while. If we went this route, DH would get loan for DP (about 10k) which we could pay off realistically in 12 months as our savings goal for the next year is 12k. The mortgage would be right around what we pay on rent.

[StartingOver10]

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@Anonymous wrote:
We would stay in the house for a while. If we went this route, DH would get loan for DP (about 10k) which we could pay off realistically in 12 months as our savings goal for the next year is 12k. The mortgage would be right around what we pay on rent.

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I'm not entirely sure how that would work because you aren't supposed to borrow funds for a down payment at all and you will have to sign an affidavit at closing that none of the downpayment funds are borrowed. See where I am going with this?

Do you have family that can gift you the funds? Can your DH get the funds from a 401k or part time job in addition to his current job or someplace else?  Just trying to come up with some ideas. You don't want to claim the funds weren't borrowed if they were - that's fraud.

[Anonymous]

Definitely get that point. Here's my thought though, if let's say my Dad took a loan out and gifted me that money...would I have to disclose how he obtained that money? Would that be the same situation if a spouse gifted it? It would technically be his debt, not mine.

I'd like to avoid touching 401's as we are already behind in contributions to them. Family gifts are not an option.

I should also state...I don't think we would really go this route, more just a conversation piece!

[Anonymous]

I agree with you. If a family member gifted you the money, it is not your obligation to explain where THEY got the money. Since you're not in a community property state and you can realistically qualify on just your income, which means you ALONE could in theory afford the house, I see no problem with it. At all. You are allowed a gift from your spouse. You are obeying all the rules and not doing anything wrong.