Purchasing investment prop w/o being on title in primary residence
Stanton WardPro Member
Dallas, TX · Member since 2021 · 7 posts · 1 voteHi All,
I am in the very early stages of this journey and am trying to figure out what the best step to take needs to be when jumping in. My wife and I purchased our current home 5 yrs ago before we were married. I am not listed on the mortgage but am listed on the title of the home. Would this mean that purchasing an investment property in my name would be viewed as my first primary residence? Also, curious about what this would mean for future portfolio expansion (e.g. using her name or mine when seeking out financing).
Hi All,
I am in the very early stages of this journey and am trying to figure out what the best step to take needs to be when jumping in. My wife and I purchased our current home 5 yrs ago before we were married. I am not listed on the mortgage but am listed on the title of the home. Would this mean that purchasing an investment property in my name would be viewed as my first primary residence? Also, curious about what this would mean for future portfolio expansion (e.g. using her name or mine when seeking out financing).
@Stanton Ward since you are married now if you purchase a home both you and your spouse will be in the Deed. It's a law in the state of TX. As for buying your first rental you can say it will be your new primary residence to take advantage of the 3.5% FHA or 5% conventional. Im part of a DFW Investors group that i can invite you to and you can ask your questions there as well.
Hi All,
I am in the very early stages of this journey and am trying to figure out what the best step to take needs to be when jumping in. My wife and I purchased our current home 5 yrs ago before we were married. I am not listed on the mortgage but am listed on the title of the home. Would this mean that purchasing an investment property in my name would be viewed as my first primary residence? Also, curious about what this would mean for future portfolio expansion (e.g. using her name or mine when seeking out financing).
@Stanton Ward since you are married now if you purchase a home both you and your spouse will be in the Deed. It's a law in the state of TX. As for buying your first rental you can say it will be your new primary residence to take advantage of the 3.5% FHA or 5% conventional. Im part of a DFW Investors group that i can invite you to and you can ask your questions there as well.
Stanton,
When you apply for a mortgage the process requires a search to see what properties you own. That search will reveal you are om title and have "Vested" interest in a property that you reside in that matches your Drivers license, income docs, etc. That would require you to buy the next home either as a Second Home/Vacation home or investment home.
Unless you planned on living in the home and the new home is bigger in GLA/SQFT versus the current home because it has to make sense. Underwriters are now overly trained to see when a person is trying to use a loophole or take advantage of the system. There are ways to use loopholes but it has to be done correctly to avoid issues.
If you can rent your current home and it cash flows simply do a cash out refinance pull out some cash and use it for a down payment. Buy a bigger home and rent the current one so you can buy a bigger home using the primary home lesser down payment. Feel free to reach out if you have any questions.
@Stanton Ward Congrats on starting your REI journey. I recommend you reach out to @Andrew Postell. He is a fellow investor and lender that lives here in the DFW area. I have have been using Andrew for many years for my investment property transactions. I also refer him to all my clients as well. I always recommend you go right to the source when you have complicated questions regarding REI financing. Andrew is that source. Also, I would suggest starting out you work with a fellow realtor & investor to help you on your REI journey. I have been doing this for years. My REI team and contacts become my clients contacts. No sense in reinventing the wheel starting out. Good base to start from when starting your REI journey. It will help you avoid the mistakes we have made along our own REI journey. Because we are human and make mistakes.
Hi All,
I am in the very early stages of this journey and am trying to figure out what the best step to take needs to be when jumping in. My wife and I purchased our current home 5 yrs ago before we were married. I am not listed on the mortgage but am listed on the title of the home. Would this mean that purchasing an investment property in my name would be viewed as my first primary residence? Also, curious about what this would mean for future portfolio expansion (e.g. using her name or mine when seeking out financing).
@Stanton Ward since you are married now if you purchase a home both you and your spouse will be in the Deed. It's a law in the state of TX. As for buying your first rental you can say it will be your new primary residence to take advantage of the 3.5% FHA or 5% conventional. Im part of a DFW Investors group that i can invite you to and you can ask your questions there as well.
Thank you, Clint! This is very helpful and I would definitely be interested in learning more as I navigate this journey.
Stanton,
When you apply for a mortgage the process requires a search to see what properties you own. That search will reveal you are om title and have "Vested" interest in a property that you reside in that matches your Drivers license, income docs, etc. That would require you to buy the next home either as a Second Home/Vacation home or investment home.
Unless you planned on living in the home and the new home is bigger in GLA/SQFT versus the current home because it has to make sense. Underwriters are now overly trained to see when a person is trying to use a loophole or take advantage of the system. There are ways to use loopholes but it has to be done correctly to avoid issues.
If you can rent your current home and it cash flows simply do a cash out refinance pull out some cash and use it for a down payment. Buy a bigger home and rent the current one so you can buy a bigger home using the primary home lesser down payment. Feel free to reach out if you have any questions.
Interesting! This is actually one of the scenarios my wife and I were already contemplating given our plans to grow our family. Didn't realize it would also play into the investment decision. I will message you further about the cash out refi. Thank you!
@Stanton Ward Congrats on starting your REI journey. I recommend you reach out to @Andrew Postell. He is a fellow investor and lender that lives here in the DFW area. I have have been using Andrew for many years for my investment property transactions. I also refer him to all my clients as well. I always recommend you go right to the source when you have complicated questions regarding REI financing. Andrew is that source. Also, I would suggest starting out you work with a fellow realtor & investor to help you on your REI journey. I have been doing this for years. My REI team and contacts become my clients contacts. No sense in reinventing the wheel starting out. Good base to start from when starting your REI journey. It will help you avoid the mistakes we have made along our own REI journey. Because we are human and make mistakes.
Great information! I just followed Andrew and plan to reach out for further advice. I would like to avoid/minimize as many mistakes as possible. Much appreciated.
@Stanton Ward thanks for the post here! Always great to hear from a fellow Texan. I wish more people would use their primary home as an investment property later - it's one of the best techniques out there.
Now, to help with some things:
1. Ownership - If you buy an investment property you do NOT have to add your spouse to title. It is a requirement on your PRIMARY home here...but not on an investment property.
2. Buying a 2nd Primary Home - You can absolutely buy a second primary home at any time after you fulfill your current commitment. Meaning, if you committed to live in a property for 12 months, and you have done so...then you can buy a smaller/larger home at any time. It's when you move BEFORE you fulfill your commitment is when everyone starts needing reasons. Don't get me wrong here, we still want you to be 100% ethical with what you are doing, but once you fulfill your obligation, it's your right to move.
3. FHA and "nuances" - Now, here's where it gets a little annoying and complicated with some Texas laws. We are a community property state. That means you own your primary home with your spouse - EVEN IF YOU DIDN'T SIGN ON IT. There are many and numerous court cases that will reinforce this. If you are married and you aren't on title....you legally own that home. The minute you get married - spouses have rights (according to Texas law). Now, if you have an "iron clad prenuptial agreement"...ok, I don't know on those (you would have to go to court)...but in just about every other scenario, spouses have rights to the primary home. So, when you go apply for your first FHA loan...and you already have ownership rights in a property with a FHA mortgage...even if you didn't sign on it...then FHA will have something to say about it. FHA can make it complicated when getting a second primary home in that scenario. HOWEVER - conventional loans don't have these same complications. You can get as many conventional primary home loans as you like! So, it would be easier to just go a conventional route when the time comes.
*WHEW* Who knew there would be so much to this? Little details do make a difference.
Feel free to reach out with any questions and maybe we'll cross paths out there! Thanks again!
I am SURE anyone that suggested buying a new “primary home” said, or meant to say…”Which you will OBVIOUsLY move in to as your new primary for at least a year and you will NOT use it as a rental instead…” as that’s obviously mortgage fraud. (Unless you put down 20-25% and pay the higher NON-owner occupied interest rate .)
So yes. You can buy a new primary home with or without your wife, but you will have to move in to it. You can rent out your current home. Good luck.