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Can two people have separate mortgages for a single property?

My fiancé and I are preparing to buy our first home with the help of my parents. They are offering to give us 50% down for the property and asking that we each get a mortgage for the remaining amount. This means getting two mortgages on the property, one in his name and one in mine. Is this feasible?
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June 03 2013 - Washington
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Only if it was through a private money lender. Most lenders have to follow the rules of the secondary market, Fannie Mae, VA or FHA and other guidelines and they would not allow 2 mortgages. You will need to each be added on the single loan.
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June 03 2013
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Having separate mortgages for equal amounts would be difficult, except in the case of a private lender, such as your parents lending you the money.

The reason is that the question then becomes which lien on the property is first.  In the event of foreclosure, the first lien is the one that is paid off first.  So, what bank wants to give two separate mortgages in the chance that they have to foreclose? 

Typically, the larger lien is considered "primary", but two equal amounts would make that a sticking point.

What you should do instead is talk about why they want the two mortgages.  Are they just trying to protect each of as having a separate stake in property? If that is the case, I believe that the community property laws in your state already take care of that, but a quick call to a property lawyer or your title company can reassure you.
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June 03 2013
 
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