Investor · Granville, OH · Member since 2020 · 36 posts · 16 votes
Is it possible for multiple people to go on a mortgage? How does that work? Say for instance, 4 people go in on a $400,000 house. They all will live there (primary residence). Now, each will pay $100,000, but all need a loan for it, so how does that work? 4 people's names on the same mortgage? What if one person stops making payments for instance? Are they other 3 now required to pay the financial slack?
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
6y
@Gere W. I bet this will vary by bank. Some may frown on more than 2, or more than 4. If it's one mortgage, there is one payment, so the bank doesn't care "who" is paying as long as the mortgage is paid each month. The bank will start foreclosure proceedings if the payment is not made in full, and could not care less what the arrangement is among the 4 people.
I would not recommend doing this - it is not a good idea. Once you're on a mortgage, there is no way to come off unless the mortgage is refinanced or paid off - one person can't simply sign a document to drop off in year 6 if they feel like it.
Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
6y
@Kyle West I can’t imagine a bank writing a mortgage with multiple unrelated people. I’m sure some do with bf/gf, but it gets messy with breakups and such.
Probably your better answer is for one person to buy the house, own the house, and collect rent from others. Or create a $100K loan that’s paid off over xx years with each ‘tenant’.
There needs to be an exit plan for all, a loan is one way.
Whether your starting a business or moving in together, it’s important to discuss exit strategies no matter how rosy it looks right now.