Buying condo, paying mortgage with student loans? Qualifying with no income?
Posted in Renting & Real Estate on 02/28/2010 04:59 pm by admin
aletheapontifex asked:
I’ll be starting at a top ten law school in the fall, and I am thinking about buying a condo instead of renting. I have excellent credit (750s), as well as enough for a 20% down payment. I have a car worth $12,000, paid off, and no other assets. I have no credit card debt, and my student loans are almost all deferred. My only real liability at this point is a $50/month loan payment. I am looking at two-bedroom units, updated, for between $115-125k. The market where I am going to school is well-insulated, a relatively affluent college town and property values have generally appreciated very well but right now things are hitting bottom (or they seem to be). The places I am looking at sold for close to $200k two years ago. I’d like to purchase one of these units and rent the second bedroom to another law student. My student loan income and money from summer employment allows me to comfortably pay the mortgage without a roommate, but with a roommate I cut costs by more than half. My plan is to live there for three years, rent it out for another 2-3 and sell it before reaching the capital gains tax cutoff (2 years residence in the 5 years prior to sale). Mortgage payment would be around $600/month, plus fees and taxes, so closer to $800/month–I’d be paying $750 to rent a shabby one-bedroom. I’ll also save $10k because I’ll qualify for residency status in the state I am moving to and in-state tuition rates. Overall I think I’ll come out well ahead of renting, my only problem is qualifying for a loan. I have been working very sporadically for the same company for the past two years part time (just a few hours here and there, might have gone inactive part of that time) and have little verifiable income. My down payment comes from savings from a good job I had a few years ago, before I went back to finish my undergraduate degree (been in school full time since 2006, worked full time before that). Parents are no help, worse off than I am financially. Banks don’t count student loans as income as far as I know. My summer employment options are solid, coming from the school I’ll be attending, but this is unverifiable as of yet. As is the rental income I’ll make from the second bedroom. Even without summer employment, my loan amounts comfortably cover the mortgage payments. I thought about a SISA loan, but I can’t lie about anything, and I hear NINA loans have gone the way of the dinosaur. Any suggestions?
It is long, but I figured it would be worth putting all the info in so I didn’t have to answer questions about it later! I’m a first time buyer, so please help, thanks!
Renting a bedroom is not illegal nor is it an “illegal occupancy.”
TROY
I’ll be starting at a top ten law school in the fall, and I am thinking about buying a condo instead of renting. I have excellent credit (750s), as well as enough for a 20% down payment. I have a car worth $12,000, paid off, and no other assets. I have no credit card debt, and my student loans are almost all deferred. My only real liability at this point is a $50/month loan payment. I am looking at two-bedroom units, updated, for between $115-125k. The market where I am going to school is well-insulated, a relatively affluent college town and property values have generally appreciated very well but right now things are hitting bottom (or they seem to be). The places I am looking at sold for close to $200k two years ago. I’d like to purchase one of these units and rent the second bedroom to another law student. My student loan income and money from summer employment allows me to comfortably pay the mortgage without a roommate, but with a roommate I cut costs by more than half. My plan is to live there for three years, rent it out for another 2-3 and sell it before reaching the capital gains tax cutoff (2 years residence in the 5 years prior to sale). Mortgage payment would be around $600/month, plus fees and taxes, so closer to $800/month–I’d be paying $750 to rent a shabby one-bedroom. I’ll also save $10k because I’ll qualify for residency status in the state I am moving to and in-state tuition rates. Overall I think I’ll come out well ahead of renting, my only problem is qualifying for a loan. I have been working very sporadically for the same company for the past two years part time (just a few hours here and there, might have gone inactive part of that time) and have little verifiable income. My down payment comes from savings from a good job I had a few years ago, before I went back to finish my undergraduate degree (been in school full time since 2006, worked full time before that). Parents are no help, worse off than I am financially. Banks don’t count student loans as income as far as I know. My summer employment options are solid, coming from the school I’ll be attending, but this is unverifiable as of yet. As is the rental income I’ll make from the second bedroom. Even without summer employment, my loan amounts comfortably cover the mortgage payments. I thought about a SISA loan, but I can’t lie about anything, and I hear NINA loans have gone the way of the dinosaur. Any suggestions?
It is long, but I figured it would be worth putting all the info in so I didn’t have to answer questions about it later! I’m a first time buyer, so please help, thanks!
Renting a bedroom is not illegal nor is it an “illegal occupancy.”
TROY