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Reduce Your Mortgage Costs by Buying a Duplex

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Tags: Market News & Trends, Home Buying & Selling

If you've been considering buying a new home recently and exploring likely properties, no doubt you've been watching the mortgage rate rise since mid-June. The interest rate on your home mortgage will determine how much above the selling price of the house you end up paying and housing prices are going up, too. If you're worried about the size of your monthly payments by the time you're ready to buy, you have a few options before you that could help to lower your costs without forcing you to compromise on the quality of your new home. Many people, once established in a property, find a way to make a little extra cash for the mortgage payment with tactics like renting out a garage loft or Airbnb-booking a spare bedroom. That said, if you're already considering sharing your space for mortgage money, why not go all the way? You can buy yourself a duplex and turn half your new home into an investment property.


AdobeStock_373280.jpegWhat Is a Duplex?                                                                               

A duplex is a single property split down the center into two separate single-family residences. This doesn't mean that someone retroactively built a wall through the middle. They're constructed often as attractive mirror images of each other with a sturdy insulated wall separating the two homes. Like single-family properties, they range in quality and size from tiny shoeboxes to towering mansions with every level in between. Whatever you want in a home, there's a good chance you can find it as half of a duplex, then share the other half with renters, family, or even Airbnb it as a whole-unit listing!


Owner-Occupancy and Renting

As long as you plan to live in your Duplex as an owner-occupant, you have some really great mortgage options. You can get a lot of the same deals as would be offered for a single-family property but with the added benefit of an entire other family worth of residence to decide what to do with. With an FHA loan, you only have to make a 3.5 percent down payment on the property and if you plan to have renters, there's a potential chance that the amount of planned rent can be calculated as income for loan qualification. With this arrangement, you can not only pay off the mortgage with rent money but also receive a better mortgage deal for doing so as long as you have a renter ready to move in with you and a lease already signed so that future payments can be verified as guaranteed income.


Renting Alternatives

The traditional way to split your duplex is by renting it out to another family, but you don't have to go this route. If for instance, you have a family member or close friend who is also looking for a new place, you can split both the mortgage and the property use with them so that you always have a neighbor you love who you won't mind sharing a yard and wall with. Another great route if you like to host guests is to Airbnb the extra residence. Whole-unit listings that are beautifully furnished and stocked with towels, soaps, and kitchen utensils book for a lot of money, and it's not uncommon to make more than you could get renting the space.


If you want to buy a home with the potential to pay its own mortgage, a duplex could be exactly what you're looking for. They can be anything you want in a house only double and you can do whatever you. 


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This blog is not acting as a mortgage lender by offering a commitment to lend. The content written is solely intended for informational purposes. This information is for independent use and is not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual and financial circumstances. We recommend you consult a loan officer to discuss your home financing goals.


Sarah Kasper
By: Sarah Kasper

Social Media and Marketing Specialist @ Wyndham Capital Mortgage Adventurer | Advocate | Dog Mom