Can a student get a morgage?

Question

I am 18 years old and I am interested in buying a owner opperated property in Erie where I will be attending college. I have found many good priced multifamily units and I have about $20,000 for a down payment. Im in the National Guard so I will be getting about $1,200 for college assistance and I also got a full scholarship. I will be probably be working a little on the side too. I don't qualify for any VA loans and I don't have a cosigner. Is there anyway I could get any type of loan or find a cosigner for a property in the 40k-60k range. I see a lot of decent properties in this range. Would they consider my benefits as income? Would they consider my 8 year National Guard contact as a secure source of current and future income? If a traditional morage is not available is there anything else I could to like a private loan network or a cosigner system? All responses are appreciated.

Dorothy Butala · Answer

Hi @James Ayres I am in the local market and have been investing here for years, I am also licensed and very familiar with options that may be available to you. If you are interested in speaking with me, send me a private message, and I will see what I can help you out with. Talk to you soon!

James Ayres · Answer

@Michael Guzik Thanks for your advice and I will be sure to get those lines of credit similar to yours. Make sure you keep me up to date on your progress and good luck

Michael Guzik · Answer

Welcome to BP and good on you for looking into REI @James Ayres. I'm in somewhat of a similar situation so I feel like I can relate to you. The biggest obstacles I have had to overcome because of my age is, lack of credit history, and job history. I don't know what your credit is like, but I would recommend getting a credit card with your bank and/or the capital one student card. I use my bank credit card for gas, and my capital one card for groceries/food. Make sure you pay both of them off on the due date and don't go crazy with them. As far as the job issues I would think that since you have that 8 year contract they would not have a problem with that. Banks like stability and that definitely is stable. Talk to a lender or the local bank around the area and ask what they like to see or what you would need to do. Networking and finding a partner would be the fastest route. Go to meet ups, answer and ask questions here on BP, and provide value to others. I'm sure someone will be willing to work with an intelligent and aspiring investor like yourself soon enough. Good luck and keep doing what you are doing it sounds like you are heading down the right path so just keep moving forward!

Cara Lonsdale · Answer

You will need a credit history with at least 2 credit lines. If you have NO credit, this is your first step. If you have ever had a carp ayment, this is a trade line. Credit cards, department store cards, real estate mortgages, etc.FHA can sometimes allow you to use alternative credit like a utility bill or cell phone bill, but it would be in your best interest to establish credit for yourself. In regards to working through hypotheticals, it is better to do with a lender, not a Realtor/Broker. THe lender will be able to give you options for your specific situation. THEN you can be equipped with your options when you go to search for a property that meets your needs.

Andrew B. · Answer

you can talk to a broker and get "pre-qualified" which means they give you a good idea of how much house you can afford, given you current situation. also, you may need to be prepared to go talk to a lot of local banks in order to find one that will lend to someone with such a short credit history. if all else fails, you may need to get a partner to do everything with you.

James Ayres · Answer

@Cara Lonsdale Thank you for your reply. $1,200 includes my National Guard Salary and my benefits. Do you think I could get a loan with no real credit history? Should I contact a broker near where I am buying the property or where I am living now in Pittsburgh? Is it common for brokers to roll closing costs into morgages? People have just told me to contact broker to hear what they have to say, are there brokers that would be willing to talk in hypotheticals or do I need to aquire real paper work? I'm sorry for the load of questions. I'm just trying to be prepared.

Cara Lonsdale · Answer

First of all....Thank you for your service. Are you active or reserve?Regarding your purchase, any income that you have from the ANG can count toward the income that you show to qualify because it can be documented, and verified by the ANG. I don't think the 2 year income history will apply here, but you will have to verify that with a lender because I am not 100% on that. Sometimes lenders consider the armed services similarly to a college grad entering the workplace, since you are committed to a field for XX amount of years, so they may count the income without the aging on it.Your $1,200 coupled with the income from the property (other tenants) who are already in place, will count toward qualifying income, so for a $60K purchase, you should be okay unless you have alot of debt that offsets the income (that shows up on your credit report). Is the $1,200 the extent of your stipend? Is that a combo of your living expenses and your salary with the ANG? If you get anything else from them, you can count it.I don't see why you couldn't move forward with your purchase. You hefty down payment only strengthens your application.

Paul Bowers · Answer

@James @James Ayres this may be a perfect opportunity for a partnership. If you can find someone local to Erie that you know and trust that has income and credit but no cash, partner up. That gets you into the property but also gives you someone to run the property after you graduate and leave the area. If this isn't something you are interested in you may also be able to find someone interested in owner financing with that large of a down payment. Just keep in mind, either way you go, with only $1,200 a month of income be very careful about any unexpected expenses before you are able to rebuild a nest egg. A few thousand dollar expense soon after closing could be devastating if you've completely emptied your bank account to buy the property.

Brian Adzadi · Answer

@James AyresI am not fully familiar with how the National Guard works. Do they pay you a monthly income or you only get paid when you are in service? Most conventional mortgage companies are willing to loan you the money as long as you have a job that pays you monthly. Your down payment is more than enough for a 40-60K loan where you don't even need a cosigner, just have steady income.