How Can a Student Raise Capital and Get a Mortgage?

Question

Hi BP,

Across the street from my sister's house is a home that is on the market for a very good deal. For the asking price, I believe that I could easily clear the mortgage payment (and other payments) with the rent and could afford the costs until it is rented out using money I've saved up from working in the past.

However, the problem is that I'm currently a senior in college and due to my class schedule I've had a hard time finding a job that would work with me. My credit is pretty good (760+ FICO score using both installment and rolling credit) but obviously the part about being unemployed is going to make it extremely difficult to get a loan through traditional routes. Also, using family and friends is a very unlikely route.

So my question is, how could someone in my position raise the capital and obtain a mortgage on a home? Is it even possible?

Rumen Mladenov · Answer

With no income and no assets, no traditional lender would lend to you (can't blame them). Your only option is a hard money loan, they lend on the strength of the deal and do not care much about your income or lack of. However you will need to put a down payment (some credit cards give promotional offers for like a year), and you will pay a very high interest rate, like 12-15% with 3-5 points. Few deals make sense with such numbers, but if yours does, look into it - your local REIA would be able to point you in the right direction for hard money.

Clayton J. · Answer

Hi Hattie,

Thanks for the responses. Unfortunately, I don't believe co-signing is an option and I know that owner financing is not an option.

Hattie Dizmond · Answer

One other option...is there a possibility of seller financing?

Hattie Dizmond · Answer

Could you get someone to co-sign the loan for you?  Or, do you have parents or relatives or close family friends that might be able to do a private funding?