Will I qualify for a mortgage??

Question

Hey guys, I'm Jefferson, I'm 19 years old, Ive been looking into real estate and I really want to start investing, however I don't have enough money to buy a 800k house with straight cash, I'm obviously going to need to get a mortgage, however I've not even had a credit card for more than a year, its around the 7-9 month range, I've never missed a payment, but I feel lenders prefer history, along with that, i work retail, I've only had this job around the same length as my credit card, I do have the money for a downpayment of at least 50-80k, my question is if I'm even able to get a mortgage, I may have the money, but I don't think that's everything lenders care about, any thoughts? anyone I should talk to? Im located in Ontario if anyone knows anyone I'm able to talk to, thx!!

Julie Toh · Answer

@Jefferson Mondragon @Cody Shearer Two words: game plan. No matter your age, you need a game plan today if you want to get qualified for a mortgage tomorrow. I was 21 when I pulled the trigger to buy my 1st property and successfully qualified for a mortgage at the best rate.

Cody Shearer · Answer

Hey Jefferson, this situation looks all too familiar. I'm 20, have gone through all the hassle you're about to go through. Right from the beginning, I will say, you can most likely find a lender that will lend to you. Will it be a prime rate? Likely not as they are taking more risk on you than they would with someone with a longer credit history. It is possible, and let me tell you I haven't found one for myself yet! But don't let that get you discouraged, start by talking to a possible partner, someone who will qualify for a loan, family member, friend, possible business partner etc. If you are able to get your parents on board with this you can also ask them to co-sign for you, which I was in fact fortunate enough to do. Hope this helps! By the way, feel free to DM me with any other questions or just to chat. It's good to see people my age getting out and familiar with real estate investing!!

Roy Cleeves · Answer

Try mortgage brokers rather than chartered banks.  They may have some lenders that would approve you.

Good. Luck

Jay Mao · Answer

you need 3 years of credit history at least so they can take you serious...

Tyler Stiller · Answer

@Jefferson Mondragon

Hi Jefferson, I am a mortgage broker in Ontario. You are right where lenders do prefer having 2 years experience on your credit report. But it isn’t a deal breaker.

Working retail is ok, but if you are not guaranteed work, then we would typically have to use a 2 year average.

I can help guide you on this, and let you know what is doable.

Huong Luu · Answer

@Jefferson Mondragon If you are in a large City, you can connect with a mortgage agent/broker to see if you quality. Not all lenders will lend to you if you live in a small city. You have 5% down payment and another 3-5% for closing. However, did you calculate having about 3 months worth of mortgage payments? If this 50-80K is your only savings, I would suggest you top up your RRSP for the FTHPB and utilize that as part of your d/p. Will you be house hacking?  Your mortgage payment assuming 3%, 25 yr amm is $3,600/m. What strategies are you going to use to support this mortgage? What is driving you to be a $800K prop? What about buying in a lower amount somewhere else as an investment that will give you cashflow while you still rent?

Good luck.

Brandon Young · Answer

Most banks in Canada i think are going to want some history before they loan to you, being 19 with only a year or so of building credit may be a hard sell to get a loan from a traditional bank. A credit union or private lender might be a better option for sure, or if you find the right deal  and could convince the owner  to do seller financing possibly. You can always ask a financial advisor at your local bank what you will need to do to get qualified also.  You're going in the right direction at 19 years old, be creative !

Will I qualify for a mortgage??

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