Mortgages Paid By Others

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Fannie Mae has recently announced the changes related to Mortgages Paid by Others.

When a person is obligated on a mortgage debt – but is not the party who is actually repaying the debt – the full monthly housing expense may be excluded from that person’s recurring monthly obligations when they go to buy their next home if:

  • The party making the payments is obligated on the mortgage debt,
  • There are no delinquencies in the most recent 12 months, and
  • The borrower is not using rental income from the applicable property to qualify.

In order to exclude the mortgage debt from the borrower’s debt-to-income ratio, the most recent 12 months’ cancelled checks (or bank statements) from the other party making the payments that document a 12 month payment history with no delinquent payments must be obtained.

David Hughson

Mortgage Broker


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