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I want to buy a house after college, but don't have a job yet. Can the banks use a projected income for a loan |
My wife and I will both have degrees that will allow us to make a set income comming out of school (R.N. & Architect). However, I will only be working 24 hrs a week up until we both graduate, but we want to be pre-qualified to know what houses we look at. We need a house before we can move back home. Can the mortgage companies use our projected incomes to give us a mortgage? No. You can do what is called a "no document" loan. Also, talk to your current bank to find out what all of your options are. There are a lot of sharks out there who will eat you alive. Have some knowledge before you start to swim in those waters. No, what is college anyway if you can not apply it to the work force. No they won't. There is no way they will know if you'll graduate and if you'll land a decent job. Try renting a house for a while. There is alot of maintenance that comes with home ownership and you may want to focus on building your careers. The only projected income the bank will use is if there is some type of rental unit in the house you plan to buy. They will add the rent you'll receive as part of your income. This makes no sense because there is no way to predict that the unit will always be rented out. You could get a stated income mortgage. Which essentially could be a projected income loan. You will pay a little more in interest than you would for a full documentation loan, but it may be worth it. While a home is a great investment and one that I highly recommend to everyone, you may just want to wait to see where you are going to land. You don't want to purchase a house and then get a job offer in another area once you graduate that you just can't turn down. Then you will become a motivated seller offering their home to a real estate investor like me for little or no profit. Hope that helps. Lenders, don't make loans on projections or potential. Normally you have to prove at least tewo years of employment in the same field. You further have to prove that you in fact earned money over the past two years with 2 yrs of fed income tax and w-2's. Now that is not to say you can't get a loan, you will be placed in the sub-prime loans with the interest rate being a little high. However they will give you a 3year prepayment penalty. You and your beautiful wife by then should be able to prove all that need to be proved to get an excellent loan with a better interest rate. Don't let this discourage you from buying, go ahead and buy, even with the higher interest rate you will still be an owner and the interest no matter how high or low is tax deductable on your income tax. You don't want to be pre-qualified you want to be pre-approved. Find yourself a mortgage broker explain to him what you are trying to do. Now what you want to look for is a sub-prime mortgage broker, don't be fooled by those that say they can, make sure you have an expert. Check with your income tax advisor or preparer for any tax advise. I hope this has been of some use to you, good luck. "FIGHT ON" NOTICE: Disregard most of the prior advice. They mean well, but they've given you wrong information. My suggesstion is to beware of anyone giving advice who has not been a mortgage loan officer, mortgage broker, a loan processor, and/or underwriter, as he/she does not understand the complexitites of loan underwriting guidelines. Also, most real estate agents haven't the first clue about mortgage underwriting guidelines. They may know some basic info, but as there are exceptions to every rule, and they WILL NOT know when to apply them. You DO NOT need a Stated income loan (or any low doc/no doc loan). You DO NOT need a 2 years of employment (for your scenario). You DO NOT need a subprime loan. Okay, with that off my back, first, no lender will use projected income for loan qualifying purposes. Also, a stated income loan will NOT work because lenders do not count part-time income as eligible income. For a stated income loan, income is not verified but employment is verified. Also, as a recent college graduate you DO NOT need two years of eligible income. One of the nice things about recently graduating college is, you can get a job IN YOUR DEGREE FIELD and as long as your in the job past the "trial period" (can't recall the correct term), typically 90 days, you can qualify for a fully documented loan. Just to reiterate, if you are a recent college grad, your degree counts as prior "work history." My suggestion would be to start lining up full-time work back home (and get a short term lease if needed), and once you're on the job for a few months, you will be eligible for a full-doc, A paper loan (assuming your credit is good). Realtor and former loan officer. |
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