Student looking to get first mortgage to start house hacking

2 Replies

Hi there! 

I am a student looking to buy my first rental property. I had my credit pulled and have a 783 credit score. I have at least $18,000 in savings and currently, have a w-2 student worker job paying $13/hour. My mortgage lender said that with all of this, I was not approved for a mortgage. What are my options to get approved? He said to get a co-signer but I'd rather not get my parents involved. I do freelance photography/videographer on the side but can't report that since it's not taxed. Should I go to a different lender to see their opinion? He also said that if I could get a letter from my employer stating that I will work full time 40/hr weeks, that could work too.

@Huy Dinh

When it comes to qualifying for a mortgage loan, its a 3 legged stool. Once any one of those legs are shaky, you have a potential of falling on your butt when you sit on it. Yes, you have the down payment. Yes, you have the awesome credit score. However, I think its your work history that is having the lenders second guessing themselves.

Even though you have a W-2 student work job, its just that, a student worker job. Meaning, to the lenders, its a temporary job that is not exactly stable because once you graduate, poof, its gone. So yeah, your lender is right, you need to show them that the job you have is a stable full time job. You can work full-time 40/hr a week as a waiter and you would have qualified more easily for this loan than as a student.

If I were you, I would hold off on trying to invest right now, graduate as soon as you can, find a job within my degree field and save up as much as I possible can while I work. Once I have a W-2 tax form the next year from the company I work for then I would start reapplying for my mortgage.

I would not use my VA loan to try to do any creative financing. I would use that as my hail Mary to finance bigger deals like Multi-families. The ABE market is not going anywhere within the next 5 years. So take your time to get things right the first time. If you want to attend RE meet ups in the Lehigh Valley area, @Justin Brown sets up one in the Allentown area.

Happy investing.   

Thank you for the great information!  The brokerage brokers that I was talking to said that since my pay has been not steady being a student worker, they'd have to report my income as an average for the past 2 years. I've made a decent amount of money between my job and the Air National Guard.  I am going to see if that makes any difference, but I would ideally like to start on this venture as soon as possible.  

I suppose I should look into reporting my freelance photo/video gigs so that I can use that as an income?  I am just worried that I will be eaten alive by taxes.

@Brian