Credit Card Center Advertiser Disclosure

Established Member
Posts: 58
Registered: ‎03-13-2012
0 Kudos

Will an inherited home affect getting my own mortgage???



Long story short...My father passed away and as his only daughter and no spouse, I inherited his house.  He has a mortgage of about $105,000 and the property is hardly worth $110,000 (on a good day).  It is a 3 story house and my dad would rent out the top two floors and he lived on the 1st floor.  I plan to keep the house and rent out all 3 floors.  


My husband just recently went onto commission income, so we have a 2 year wait until we are able to purchase a home.  I talked to the bank and they said they will add me as a 3rd party to the loan.  It will not go on my credit report, but if/when we sell the house, any profit will come to me.  


So my question is...Will having this responsiblity of paying this mortgage be seen as a debt/liability?  Or will it be seen as income due to the rent paying the mortgage and then some?  Or will they even know about this property at all since it won't be on my credit report?  

Established Contributor
Posts: 857
Registered: ‎02-11-2012
0 Kudos

Re: Will an inherited home affect getting my own mortgage???

It will not matter if it is or is not reporting. When you apply for a loan (Your newer house) you will legally need to disclose that you are responsible for the debt.  So yes, it will go against your proposed borrowing limit. Additionally, banks and financial institutions will not count rental income as fully weighted. This means, it is not guaranteed monthly income so you could be hurt even more on your borrowing limit. AS always YMMV dependent on your financial institution's policys and your loan officer.

Starting scores 01/02/2012 EQ 707(Fico) TU 733(Fico)XP 735 (FAKO)
Updated scores 05/01/17 EQ 824, TU 812 EXP 810 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
Established Contributor
Posts: 619
Registered: ‎09-26-2011
0 Kudos

Re: Will an inherited home affect getting my own mortgage???

The taxes and insurance on that home will also count against your DTI ratios.

Starting Score: 10/1/2011 EQ 568 TU 593
Current Score: EQ 664 TU 700 EX 701 (FAKO)

Posts: 10,788
Registered: ‎03-06-2010
0 Kudos

Re: Will an inherited home affect getting my own mortgage???

If the lender is adding you to the mortgage than there is a good chance that they will report the payments on your CR.

As pointed out before, even if the lender/servicer doesn't report the payment on your CR, you will have to disclose that you are responsible for the loan and then you will need to show the new lender that the payments have been made on time.


Yes, it will impact your DTI.

In order to use whatever rental income you receive from the property, you will need to report that income on your tax returns. The new lender will want a copy of your returns showing the rental income and expenses.


Also, as pointed out, they will not use 100% of the rental income. The new lender will put in an amount for vacancy and collection even if the property is fully rented and everyone is paying ontime (on a single family home its is typically 25% of your gross rents - on a multi-unit residential building it can vary from lender to lender). Keep great records of your rental receipts and expenditures too. It will help at tax time AND when you need to get a mortgage for your new purchase.


You might want to contact a CPA now to have him show you the way to handle the rentals from a financial and tax viewpoint so that you get the overall best result from your  investment property. There are some real benefits to owning rental property along with a few problems.

Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.

† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
‡ Credit cards for FICO Score ranges: The score ranges are guidelines based on internal myFICO analysis of actual applicant approvals, and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range. These ranges were not provided by any card issuer.

* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.

Copyright ©2001-2015 Fair Isaac Corporation. All rights reserved.   | Terms of Use | Privacy Policy | Sitemap

IMPORTANT INFORMATION: All FICO® Score products made available on include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.