Getting a mortgage loan as a student

5 Replies | Chicago, Illinois

Hi BiggerPockets Forum, 

You guys have been an incredible help in the process of buying a property. However, since I do not have a pre-approval, I cannot move forward. Here is the issue. 

I am currently in college finishing up my master's degree. I have a full time job next year August and my girlfriend too who will also be paying down my mortgage. I do not have any debt, have 758(Even though my FICO says its 778) credit score and have about 70+k in savings. I did my internship this year and doing side gigs here and there. However, all the lenders I have been talking to says without a 2 year work history pre approval is hard. I want to get a place before August when I start work and it seems like renting is inevitable since I need my paystubs. Does anyone know who got around this or any lender that has lend out in a similar circumstance? Is renting the only option?

Thank you!

I believe a degree and first job under the same umbrella as your college major counts for the two year work history. Look into it, and maybe focus on lenders who can accomodate. I'd imagine the big banks (BoA for example) would have programs best in-line with what you need.

I have worked with a few younger investors. You can get pre-approved before you start the job by using an offer letter, they also can count your masters degree as work history if same field as the offer letter. The other option as mentioned above is using a co-signer. Just make sure you clarify with lender the stipulations to have co-signer later on removed as it can be costly to do an entire refinance and rates are likely only going up.

College years will count towards qualifying for the 2 year history, but a lender will also want to include an offer letter stating how much you will be making and 30 days worth of paystubs. So basically you will need to have started the job before you can buy. One suggestion for you is to pay cash for the home, and then once you get the job you can do what is called delayed financing (only needed if you own the home for less than 6 months). Delayed financing will allow you to do a cash our refinance to recoup up to the amount that you paid for it. Keep in mind however that you still need to abide by the LTV guidelines as a cash our refinance. If you do own the home for 6 months, you can just do a cash out refinance once you have started that job.