House Hacking for W2 employee with lower income getting financing

[Timson Sunny]

Hi everyone,

I'm looking to house hack a home soon to start investing in real estate. I currently work full-time in recruiting. I've been with my company for 8 months now. I'm also a real estate agent and was doing it full-time before until business slowed down for me. I originally got my license to understand the real estate industry better and take advantage of the benefits of my license when purchasing deals. I now decided now is the year for me to start investing and house hacking makes sense for me at this time. I looked into different financing options and decided that the Navy federal home buyers' choice program would be the best option for me at this time. I plan to take advantage of the no down payment option with no PMI. I would only have to cover the closing cost which I know typically is 2-3% of the purchase price. The hurdle that I have is my company is only paying me a base salary of $45k and I haven't been in the industry for more than 2 years. I want to get approved for at least $265k-$300k but I doubt that's possible with my income. I was thinking of getting a Co-borrower but I would rather not have one. Any suggestions?

Thank you,

Timson Sunny

[Lawrence Potts]

Quote from @Timson Sunny:

Hi everyone,

I'm looking to house hack a home soon to start investing in real estate. I currently work full-time in recruiting. I've been with my company for 8 months now. I'm also a real estate agent and was doing it full-time before until business slowed down for me. I originally got my license to understand the real estate industry better and take advantage of the benefits of my license when purchasing deals. I now decided now is the year for me to start investing and house hacking makes sense for me at this time. I looked into different financing options and decided that the Navy federal home buyers' choice program would be the best option for me at this time. I plan to take advantage of the no down payment option with no PMI. I would only have to cover the closing cost which I know typically is 2-3% of the purchase price. The hurdle that I have is my company is only paying me a base salary of $45k and I haven't been in the industry for more than 2 years. I want to get approved for at least $265k-$300k but I doubt that's possible with my income. I was thinking of getting a Co-borrower but I would rather not have one. Any suggestions?

Thank you,

Timson Sunny

Are you a veteran or are family member of one?

Depending on what you were doing previous to your recruiting job, you may still be able to qualify. If you were in school previously, they may allow for just a few months of work history up to one year if your work is in the industry you studied. If you worked previous to this current job, they will allow that work history as well as long as you didn't change industries. The biggest thing they want to see is consistency in your work history (consistent work industry = job security and safety = more likely to not miss a mortgage payment).

If you haven't yet, talk to their lenders and see what you can get approved for and how to improve your approval.

Co-borrowers are very helpful, but are limited in usage depending on the loan you are using. Some are only allowed for occupying members (someone that is going to live in the home with you). Others allow for non-occupying co-borrowers.

Hope that helps!

[Peter Mckernan]

Quote from @Timson Sunny:

Hi everyone,

I'm looking to house hack a home soon to start investing in real estate. I currently work full-time in recruiting. I've been with my company for 8 months now. I'm also a real estate agent and was doing it full-time before until business slowed down for me. I originally got my license to understand the real estate industry better and take advantage of the benefits of my license when purchasing deals. I now decided now is the year for me to start investing and house hacking makes sense for me at this time. I looked into different financing options and decided that the Navy federal home buyers' choice program would be the best option for me at this time. I plan to take advantage of the no down payment option with no PMI. I would only have to cover the closing cost which I know typically is 2-3% of the purchase price. The hurdle that I have is my company is only paying me a base salary of $45k and I haven't been in the industry for more than 2 years. I want to get approved for at least $265k-$300k but I doubt that's possible with my income. I was thinking of getting a Co-borrower but I would rather not have one. Any suggestions?

Thank you,

Timson Sunny

 You are looking at it correctly! I would use that veteran program (thank you for your service), and I would check into some local community banks and credit unions sometimes they have an exception for people working there 12 months (I know you said 8 months). If you have experience that expands to that 12 month mark, does not have to be with the same company but in the same line of work you could still get the loan if not I would wait till August which is a short time and then get a loan then.  

[Joshua Filkill]

As @Lawrence Potts mentioned you can have school count as work history. I house hacked one year after graduating and didn't work in an industry that I studied in college so not sure if that always applies, could depend on the lender. Just call up the lenders there and ask them these questions, they'll have the answers for you and will put together your pre-approval. 

[Callaway Pate]

Hey Timson, That's a good question. I'm graduating from college and was wondering the same thing. I have learned from talking to a lender that if you were in school before your job and your job is related to what you studied, lenders may be lenient about about how long you've been in your job. I guess it's mostly to verify you have job security but that's all I know for this particular situation. Good luck qualifying!

[Ryan Thomson]

@Timson Sunny asking here can certainly help give you some ideas. BUT if you want to know what you can qualify for you need to talk to a lender. Give them your info and they will let you know what you qualify for and help guide you through what needs to be done in your financial situation if you want to qualify for more. 

[Taj Akinbode]

@Timson Sunny

Congratulations on taking the important step of zeroing in on the mortgage provider you would like to use. For personalized assistance, I suggest contacting Navy Federal Credit Union and speaking with one of their Mortgage Loan Officers who can address your specific needs and answer your questions. I know they have a Steller customer service

Not sure how long you worked as a real estate agent. As a fellow agent and Realtor® serving the Houston market, please don't hesitate to reach out to me if you have any questions or concerns. I'll be happy to assist. 

[Timson Sunny]

Quote from @Joshua Filkill:

As @Lawrence Potts mentioned you can have school count as work history. I house hacked one year after graduating and didn't work in an industry that I studied in college so not sure if that always applies, could depend on the lender. Just call up the lenders there and ask them these questions, they'll have the answers for you and will put together your pre-approval. 

 Thank you Joshua!

[Timson Sunny]

Quote from @Taj Akinbode:

@Timson Sunny

Congratulations on taking the important step of zeroing in on the mortgage provider you would like to use. For personalized assistance, I suggest contacting Navy Federal Credit Union and speaking with one of their Mortgage Loan Officers who can address your specific needs and answer your questions. I know they have a Steller customer service

Not sure how long you worked as a real estate agent. As a fellow agent and Realtor® serving the Houston market, please don't hesitate to reach out to me if you have any questions or concerns. I'll be happy to assist. 

 Thank you Taj!

[Ray Hage]

Starting out with a co-borrower isn't a bad idea. Your best bet to speak with a couple of direct lenders and mortgage brokers to see what you can qualify for alone. Then you can bring in a co-borrower if needed. Keep your RE license and try to make some more money as best as you can. The market has slowed down a bit but there are still investors out there and people that need their first homes.

[Justin Strait]

Quote from @Timson Sunny:

Hi everyone,

I'm looking to house hack a home soon to start investing in real estate. I currently work full-time in recruiting. I've been with my company for 8 months now. I'm also a real estate agent and was doing it full-time before until business slowed down for me. I originally got my license to understand the real estate industry better and take advantage of the benefits of my license when purchasing deals. I now decided now is the year for me to start investing and house hacking makes sense for me at this time. I looked into different financing options and decided that the Navy federal home buyers' choice program would be the best option for me at this time. I plan to take advantage of the no down payment option with no PMI. I would only have to cover the closing cost which I know typically is 2-3% of the purchase price. The hurdle that I have is my company is only paying me a base salary of $45k and I haven't been in the industry for more than 2 years. I want to get approved for at least $265k-$300k but I doubt that's possible with my income. I was thinking of getting a Co-borrower but I would rather not have one. Any suggestions?

Thank you,

Timson Sunny

I just went through this scenario. I used Navy Federal's RealtyPlus program to find a home and get the bonus back. I was going to use Navy Federals mortgage service for my VA loan but my realtor connected me with Jason Rea at NBKC bank and they gave me lower rates and faster closing with no points than Navy Fed. I would recommend reaching out to them about your scenario and see what they can pre-qualify you for.

[Timson Sunny]

Thank you Justin! I'll be giving them a call soon.

[Timson Sunny]

Quote from @Ray Hage:

Starting out with a co-borrower isn't a bad idea. Your best bet to speak with a couple of direct lenders and mortgage brokers to see what you can qualify for alone. Then you can bring in a co-borrower if needed. Keep your RE license and try to make some more money as best as you can. The market has slowed down a bit but there are still investors out there and people that need their first homes.

 Thank you Ray!

[Laura Shinkle]

Definitely talk to lenders, be upfront about your situation, and see what you can do. It'll be a lot of talking, phone calls and document uploading, but that's how you'll find out definitively. 

A co borrower isn't a bad idea, but does take some of the autonomy out of owning the home, plus you have to find someone with good credit and income that would be willing to do so. That may hinder the co borrower from buying another home or getting loans. 

Also, I recently saw a lender that posted your commission can be used for certain things in purchasing a home, such as down payment. That may open up lending options if NFCU won't allow it. 

All this aside, talk to some lenders. That's your first step. Best of luck!