Please lead me in the direction I need for a loan

5 Replies

Hey guys,

Im looking for buy a 2-4 unit property and house hack for my first time home purchase. I need a low down payment. I will be gifted the down payment up to 10%. Looking for a property between 900,000- 1.2m. Im in the bay area.

My income has been between $25,000-$30,000 between 2015-2019. In 2020, I earned about $18,000 and received unemployment due to the pandemic and getting hours reduced. Will Lenders count that awful pandemic year against me? Additionally, I have made about $18,000 this year so far and will be starting a new job in 2 weeks with a much higher payer.  


Heres my questions..

1. Will they look at 2020 income or do they have leniency for once in a lifetime pandemics?

2. Will lenders take into account that I have a much higher paying job now? (And have been in the same field for over 10 years + Recently graduated with a higher degree)

I may add more questions, but those are mymain ones right now. 

Originally posted by @Melissa Marques :

Hey guys,

Im looking for buy a 2-4 unit property and house hack for my first time home purchase. I need a low down payment. I will be gifted the down payment up to 10%. Looking for a property between 900,000- 1.2m. Im in the bay area.

My income has been between $25,000-$30,000 between 2015-2019. In 2020, I earned about $18,000 and received unemployment due to the pandemic and getting hours reduced. Will Lenders count that awful pandemic year against me? Additionally, I have made about $18,000 this year so far and will be starting a new job in 2 weeks with a much higher payer.  


Heres my questions..

1. Will they look at 2020 income or do they have leniency for once in a lifetime pandemics?

2. Will lenders take into account that I have a much higher paying job now? (And have been in the same field for over 10 years + Recently graduated with a higher degree) 

I may add more questions, but those are mymain ones right now. 

Generally lenders will allow 35% of your monthly income to go against housing costs. So if your gross yearly income is $24,000 then your monthly income is $2,000 and 35% of that is $700. Then they take that number and do a calculation to figure the loan amount at the prevailing interest rate. 

Let's say you can get a 3% loan because you have a FICO score of 640 or better. So, $150,000 @ 3% interest for 30 years is a payment of $632 then you add property tax and insurance. If that makes the number higher than $700 a month on the  house payment you are buying, you adjust the amount borrowed downwardly. Keep in mind that you can put down as much as you want.We are talking only of the loan amount payment here. 

So, if you want to buy a $1,000,000 property and put down $850,000 you can buy a $1,000,000 property with an income of $24,000 a year. You have to prove your income and tax returns for two years, so 2019 & 2020 would work.

@Melissa Marques the first question to ask is how will you afford a 900k  house hack when you only make 18k? The explanation by @Mike Hern is correct but to add, you can use the most recent 30 day pay stubs of the new job to qualify you but unless you are earning upwards of 150K/yr, from the numbers you provided, you can't afford a 900-1.2m property. You can use 75% of existing rents on a  multifamily but with low down payments and rents, I doubt you'd qualify for that high of a property value unless you put a substantial down payment (30-50% down). 

Hmm Well first, I do not make 18k a year. And if I find a good deal on a 2-4 unit and house hack then I’d def be able to make the payment work. Don’t you guys listen to bigger pockets podcasts?? Or any of the books? There are ways guys! Thanks anyways!

Hello Melissa. You do have options. There is a way. It can be done. My name is Ken Flucas. I submitted a reply that I think would help you but it was flagged and removed because I was unaware of the rules. I'll try to think of another way to help without breaking the rules.