How many people can be on a mortgage?

Some people prefer to buy a home with other people, be it a spouse, siblings, or friends. It is possible to have more than one person on a mortgage. There’s no limit, legally, to how many people can be on a mortgage at one time. However, it may be difficult to get loan approval with more than four borrowers on a conventional mortgage.

Conventional loans are backed by government-sponsored agencies like Freddie Mac and Fannie Mae. Fannie Mae’s website only supports four borrowers and lenders will have to underwrite more members manually. Not many lenders do this, so the chances of loan approval are smaller. One exception is the U.S. Department of Veterans Affairs (VA) loan which only allows the veteran and their spouse to be on the mortgage. 

Having multiple borrowers on a mortgage can impact your approval chances and bring both advantages and drawbacks:

Benefits of Co-Ownership:

• Enhanced Loan Approval: Combining incomes and credit scores can strengthen your application, increasing the chances of securing a mortgage, especially for younger or first-time buyers.
• Lower Down Payment: Sharing the financial burden can make affording a down payment easier, allowing you to access a wider range of properties.
• Reduced Monthly Payments: Splitting mortgage payments eases the financial strain on each individual, freeing up funds for other expenses or investments.
• Shared Ownership and Responsibilities: Joint ownership distributes maintenance costs, chores, and decision-making, fostering collaboration and support.

Challenges to Consider:

• Joint Liability: All borrowers are equally responsible for the entire loan. If one fails to make payments, it impacts all credit scores and the remaining borrowers’ finances.
• Differing Priorities and Preferences: Sharing ownership can lead to disagreements over home improvement projects, maintenance decisions, or future plans for the property.
• Complexities in Selling: Selling a co-owned property requires agreement from all owners, potentially delaying the process or creating conflict.
• Potential Legal Complications: Sharing ownership necessitates clear legal documents outlining rights, responsibilities, and contingencies in case of a divorce, death, or other unforeseen circumstances.

Ultimately, co-owning a home with multiple borrowers can be a rewarding experience with significant financial benefits. However, understanding the potential challenges and taking necessary precautions is essential to ensure a smooth and successful journey towards shared homeownership.