I am in the beginning stages of "shopping" for a lender to purchase my first owner-occupied investment property. I do realize that every lender is going to be different and that there are a lot of factors that come into play when trying to qualify for a loan (FHA 203k specifically) - but, my current situation is a little less conventional than most. I have "good" credit, sitting right at 700, so I am doing everything possible to make sure that I keep it that way while applying for a mortgage. I am worried about looking for preapproval and getting the hard inquiries that come with the search - which brings me here!
My current job pays a very low salary, but I have room and board (I pay literally nothing out of pocket every month) to go along with the low salary. I am going to include the potential rental income in my mortgage search as well as my low salary, but will they take into consideration that my entire salary is going into savings each month? Also, if I end up switching jobs (for a much higher salary, but obviously it will be a brand new job) will that make me much less desirable to lend to?
Thank you all for your input, it is greatly appreciated!
I hate to tell you this but there a lot of red flags for a lender in your situation. Traditional lenders don't like when people recently have switched jobs unless its in the same field. It is also hard for a lender to quantify the value of "room and board" and as banks have to justify their loans to the government I think you may have a hard time to stick their neck out for you unless your room and board is somehow listed on your paycheck. Talk to a local lender about your situation. They may walk you through some options before you fill out an application and they pull your credit. Also, since you have no investment history a lender is most likely not going to give you any credit for the potential income of your planned investment.
You may be able to get a private lender or perhaps a bank that does some portfolio lending to give you a chance.
Keep looking and asking questions. Just because one bank says no, doesn't mean another won't say yes. Community banks are more likely to have flexibility in their underwriting than national banks. That has been my experience anyway.
Hey Joshua, thank you for the reply! I appreciate the honest truths, I know it will be an uphill battle. It was especially beneficial to hear about the unlikeliness that a lender will loan any money based on the potential rental income - I have been very curious about that aspect of the loan process. I'll keep shopping around and asking questions, thanks again!
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