Updated over 7 years ago on . Most recent reply
Buying a house while in college
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.
Most Popular Reply
@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.