# Student roomates as income for mortgage qualifying?



## Addy (Mar 12, 2010)

Curious as there's a slight chance we may be looking at purchasing a house near Dalhousie if banks or other mortgage companies generlly consider student rentals as income towards a higher mortgage qualification? Specifically students who are room mates as opposed to a separate apartment in the home.

If the answer is yes, do they consider half the income or the full potential amount?


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## Dana (Nov 17, 2009)

I am not sure if the lender would consider a room-mate as income. It may have to be done as an exception. They would likely require a signed lease to prove the income. As only half of the income is used in the calculation when you are renting a separate apartment in the home, I would think the same 50% guideline would apply. Would you need a CMHC approved mortgage? If so, the guidelines for this may be posted on the CMHC website.


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## mrcheap (Apr 4, 2009)

I was looking at buying a place to live in and share with other students, and the mortgage broker I was talking to said NOT to mention students at all (apparently lenders don't like to get into student housing). 

I'm not sure if the income would offset this bias or not...


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## Addy (Mar 12, 2010)

Thanks Dana. I'm hoping someone can verify for me though so I'm not guessing. I think your assumptions are most likely correct (at least I mean I was thinking the same as you are!). We were credited 50% on our condo income, so it makes sense if thats the standard.

We won't need CMHC, we will have at least 40% down, hopefully more. Just the houses are so darn expensive walking distance to Dal, and we have always had student roomates and really like the company and extra $$ so we hope to keep it up if we end up in Halifax. Rooms seem to go for well over $500 each, so if we have two rooms rented out that would certainly help with the mortgage. But if we do it on our own (ie with just my husbands income) we would quality for a fairly low mortgage and may have to sacrafice how close we're able to purchase to Dalhousie.

mrcheap thats really interesting, I wonder why the lender would care? If the house were trashed as long as the house is insured as it should be I can't imagine any reprecussions to the lender. Maybe more student housing houses go into receivership? I should research this a bit more... because if this is the case, there's no sense in even considering the option of roomates to boost our qualifying amount.


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## Addy (Mar 12, 2010)

Most interesting is the article (with a great video explaining it all). No longer will the rental income be deducted from what you would pay monthly for your mortgage... now it simply is added as income for the property owner. IE added as if you made that income via employment, etc. Big changes, and huge changes to the amount people will qualify for now. The video shows how with rental income you could have a 430K mortgage while now, with the new rules you can only get a 200 and something.

It's worth watching.

*http://vreaa.wordpress.com/2010/03/...-rules-460k-mortgage-new-rules-230k-mortgage/*


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## hystat (Jun 18, 2010)

Oshawa, ON decided to clamp down on student rentals a few years ago. 

The town started enforcing the single family bylaws in the area all around Durham college. 

I would have to think banks read about that - it was in the papers a fair bit. 

check local zoning in case they ask

http://oncampus.macleans.ca/education/2007/10/31/police-raid-student-houses-in-oshawa/


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## Addy (Mar 12, 2010)

Thats an excellent point, and anyone looking at renting anything out should always check into the zoning bylaws. It's better to know and then decide to proceed (ie go ahead and rent if everyone else is, just be aware it may come back to bite you in the butt someday) than not know to begin with.

Just to be clear, renting out a house or an apartment or a suite in your home is what the bylaws cover - not having a roomate in a house you own. It's ironic how Vancouver changed their laws years ago so anyone can have a 'granny suite', yet other towns/cities are banning it outright and, clearly from the article posted above, enforcing it.

Often the crackdowns of illegal suites occur when local residents complain.... either because of noise, or more often than not, because there's not enough parking spots for their bmw's... boo hoo... :roll: And believe me , I know this as I worked in police services for 10 years.


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