Expert: Dick Dennis - 9/14/2007

Question
My fiance and I have been teaching in South Korea for a little over a year now, and we plan to use the money we've been saving to buy a house in Texas or Oklahoma (we have family in both places) in about May 2009.  We plan to get a three-bedroom house and rent it to to my brother, who will be starting his second year of medical school then, and two of his friends.  So, I have a couple questions:

1. If we add his name as a co-owner, would the house qualify as owner-occupied? And, would we then qualify for a better mortgage rate/insurance rate/etc.?
2. We would be unemployed at the time that we would be in the US to buy the home, although we plan to get new teaching jobs and go overseas again after everything is settled. Since there is a huge demand here for people with our skills, it will be easy for us to get the same jobs or better jobs than we have now. Would it be possible to get a decent mortgage as unemployed people, in our case?

Thank you very much for your time and help!
Sincerely,
Katie

Answer
If you're going to rent the house to your brother, it'll be an unusual situation, but can be done with his name on title with you, AND ALSO ON THE LOAN. I strongly suggest you consult with a REAL ESTATE attorney to put this matter together for you, to protect your interests. All too often kins change color and make it difficult to sell sometimes in the future, not to mention friends and potential spouses. I do wish you well.

Dick Dennis   dixiedee13@verizon.net