Hello my name is Erik and I am a new member to BiggerPockets. I was introduced to the BiggerPockets podcast by my brother and I love it! I've been an active listener for the past few months. I'm currently a student at the University of Texas at Dallas majoring in Mechanical Engineering and am graduating this upcoming December. I plan on investing in Real Estate some time in the near future
I've been wondering on whether buying a house and paying for a mortgage will be a smarter investment instead of continuing to pay rent at the apartment I'm living in. I am currently throwing money down the drain by paying $850 in rent at the moment, and noticed that I can be paying for a mortgage for almost the same price. With my brother, a student paying rent as well, we both have about 14k to put up for a down payment on a home. If we buy a 120k home, I calculated that our monthly mortgage will be about $870, assuming a 4.605% interest rate.
The only problem will be getting approved for the loan since we are both unemployed without a steady source of income. Our only income comes from our scholarships. Will we able to get approved if we can get a co-sign?
Would this be possible to do? If so, will it be a smart thing to do? Also, is there anything that I need to consider that I'm possibly missing? I am completely inexperienced as I have never bought a home before. My Real Estate education comes from reading and listening to podcasts only.
@Erik Gonzalez . I commend you for thinking about & planning to take control of your future.
A Typical Mortgage Lender will need to see how you can pay back the Mortgage based on your current income. For Example, for an $850 Mortgage Payment, Lender is going to want to see at least 3 times that amount in income.
Will you scholarship money satisfy the requirement - I don't think so! Hopefully one of the Lenders on the forum can clarify!
Other options that might be available are:
1. Non-Traditional Loans, Seller Financing for example.
2. Co-Signer. Probably best alternative - if you can find one.
3. Lease Purchase
I agree with your statement about pouring your money down the drain. For most folks, starting out, that where we are! Not a lot of other GOOD reasonable options available.
I would suggest biding your time, concentrate on your education, get your degree, starting bankrolling some cash, and be ready to rock & roll a few years down the track.
@Jim Cummings Thank you for your response. You're right I won't have 3x the amount of income. I also will probably have enough money in the case that the house needs a major repair on it. I do however have a job lined up for January right after I graduate that will make much more than 3x the mortgage payment. Can that be taken into consideration for the loan?
@Erik Gonzalez . Fantastic News & Congratulations on the upcoming job.
In most cases, if you were changing jobs to a "New Career Field", Lenders will want you to have some time on the job. Don't think that applies to new entrants from College working in their field of study. Most likely you'll be able to purchase straight away, assuming all else is in order.
Typically a Lender Pre-Approval is good for 6 Months, and after that time period, the Lender would just need to update the file with any new data. So, I would say within 60 - 90 days would be a good time to contact a Lender for Loan Counseling and start on the Pre-Approval process.
There are several Lenders on the BP forum from the Dallas area, or PM me and I'll put you in contact with a Lender I've used for years that will take excellent care of you.
@Jim Cummings That sounds great! I greatly appreciate your advice and will definitely PM you sometime in the near future to get into contact with that lender.
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