Buying condo, paying mortgage with student loans? Qualifying with no income?

Posted on Oct 23, 2012 in Stated Income Loans

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Question by crave132: How should I go about purchasing my gram’s house? Mortgage? Home Equity? FHA? It is in an estate of my dad.?
Ok so here is the situation. My gram died over a year ago and her house has been sitting in an estate that my dad and his 3 siblings are in charge of. He has been holding up the estate so I can get the house, more about but I have to save up money first. I have the money saved up now, this just need to see about what my best method is for getting the house? Regular mortgage rates at local banks are 5% for 30 years and up. The house was appraised at 72000 and I am getting it for 60000, 15000 for my dad and each of his 3 sibling divided equally. My question is should I get the house deeded to me for $ 1 to avoid having to pay all the closing costs and do it as a home equity loan? Is there somewhere better to get a mortgage than a local bank? None of the big banks will do FHA/government loans. Please tell me the best way to go about getting the house in my name, and getting my aunts and uncles their money.
I have already been qualified for the loan, but if I do a home equity I wouldnt have to pay closing costs. Yes i know what a home equity loan is, I used to work as a credit analyst at a bank. There is no money owed on the house, and if it were in my name I would have all the equity to take out. The only reason I need money is because my aunts and uncles want their share for the house, and they want it soon. I have 5000 saved up, which is 5% down plus closing costs. I just want to know if there are any other loopholes besides having the house deeded to me for $ 1, which is not fraud and is legal. Thanks for the answers so far, but you havent told me anything I dont already know.

Best answer:

Answer by Greg K
There are a number of ways to do this, but it’s all about the level of trust between the parties.

First off, the purchaser needs to be someone that can get a loan. If that is you, fine, but if not, you need to figure out who can meet the lenders requirements. What mortgage products are available to you are predicated on the creditworthiness of the borrower. A mortgage broker may be of real assistance to you in figuring this out.

Closing costs vary with the mortgage product. You will need to figure out the nuances of closing costs as you decide your mortgage.

Finally there is the question of title. Assuming you purchase the house, the title is now in your name. It sounds like the house is already in a trust for the estate. Transferring the beneficiary name on the trust may be the easiest thing to do. And it doesn’t involve much money at all.

Nothing needs to change until you sell the house. If the trust owns the house, the trust gets the money. You need to look at the trust documents to understand what happens to the money in the trust.

Good Luck

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Question by aletheapontifex: Buying condo, ampoule paying mortgage with student loans? Qualifying with no income?
I’ll be starting at a top ten law school in the fall, and I am thinking about buying a condo instead of renting. I have excellent credit (750s), as well as enough for a 20% down payment. I have a car worth $ 12,000, paid off, and no other assets. I have no credit card debt, and my student loans are almost all deferred. My only real liability at this point is a $ 50/month loan payment. I am looking at two-bedroom units, updated, for between $ 115-125k. The market where I am going to school is well-insulated, a relatively affluent college town and property values have generally appreciated very well but right now things are hitting bottom (or they seem to be). The places I am looking at sold for close to $ 200k two years ago. I’d like to purchase one of these units and rent the second bedroom to another law student. My student loan income and money from summer employment allows me to comfortably pay the mortgage without a roommate, but with a roommate I cut costs by more than half. My plan is to live there for three years, rent it out for another 2-3 and sell it before reaching the capital gains tax cutoff (2 years residence in the 5 years prior to sale). Mortgage payment would be around $ 600/month, plus fees and taxes, so closer to $ 800/month–I’d be paying $ 750 to rent a shabby one-bedroom. I’ll also save $ 10k because I’ll qualify for residency status in the state I am moving to and in-state tuition rates. Overall I think I’ll come out well ahead of renting, my only problem is qualifying for a loan. I have been working very sporadically for the same company for the past two years part time (just a few hours here and there, might have gone inactive part of that time) and have little verifiable income. My down payment comes from savings from a good job I had a few years ago, before I went back to finish my undergraduate degree (been in school full time since 2006, worked full time before that). Parents are no help, worse off than I am financially. Banks don’t count student loans as income as far as I know. My summer employment options are solid, coming from the school I’ll be attending, but this is unverifiable as of yet. As is the rental income I’ll make from the second bedroom. Even without summer employment, my loan amounts comfortably cover the mortgage payments. I thought about a SISA loan, but I can’t lie about anything, and I hear NINA loans have gone the way of the dinosaur. Any suggestions?
It is long, but I figured it would be worth putting all the info in so I didn’t have to answer questions about it later! I’m a first time buyer, so please help, thanks!
Renting a bedroom is not illegal nor is it an “illegal occupancy.” 😛

Best answer:

Answer by gorkbarque
With the credit situation being what it is you will be hard pressed to obtain a mortgage loan with no two-year history of steady employment in the same line of work. You will also not be able to claim any rental from a second bedroom as this would be an illegal occupancy and would not count towards your income. You need at least two years uninterrupted work history in the same field in order to qualify for a loan. As it is you do not have it, therefore no mortgage. You will need to rent for at least two more years.

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2 Comments

  1. You have a serious problem qualifying for a loan without verifiable income these days. Your student loan money is not income! It is borrowed. Rental income will be seriously discounted in the income equation & is not enough to help you qualify for the mortgage.

    Yes, it can make more sense economically to purchase a 2 BR condo and rent out one BR to a fellow student. But you must have a job and income to qualify for a loan. Can you work more for the company you have been working for over the past couple years? If you did that, then talked to the bank, perhaps with good credit & big down payment you could swing the deal.

  2. don’t buy a condo buy something with a little character for god’s sake…not something stamped out with a cookie cutter