Can I prequalify for a home loan w/ no job?
Here's the deal. I'm currently a college student. I have no job but have about 15,000 in cash reserves. I really like this small house for 75,000. I have a credit score of about 700. Would I prequalify for a home loan? I don't want to get my credit ran if there's no possible way to do this... The monthly mortgage payment would be equivalent to what i'm paying for rent right now. This would also be my first home. Any experts out there on this?
I graduate at the end of this year so I'll be getting a job within the next few mths.
- 1 decade agoFavorite Answer
Don't be afraid of putting in an offer before prequalifying. Contingencies on the buy-sell agreement are normal, including financing that is acceptable to you. Get a buyer's agent to help you with this. You'll need to put earnest money down if the offer is accepted. $500 may be enough, but more might be expected or a better incentive for the seller to accept offer. Depending on the house, your market, and the length of time the house has been for sale, consider making a lower offer than the asking price.
Once they've accepted your offer, go after all sources of funding. In your favor is 20% cash for the down payment and good credit. Your resources for paying rent may be taken into account.
If you don't qualify for funding, consider a co-signer for the loan. After you have an established job you can refinance in your name only. Another option might be a trust set up to make the payments for a year or two. Whether you have good resources or none, explore various possibilities. If the home isn't in demand, ask if the owner would be willing to carry the contract. It could be from a year to several years (payments same as a loan; just needing to refinance after a while). If you default, the home would revert back to him (or her). If the owner finances, don't expect any discounts on the price and the interest rate may be higher.
Many lenders may turn you down, but it only takes one good one to get things going. Watch the terms and rates. Don't get desperate; you don't want to get into a bad deal. If you have student loans coming due after you graduate, these will be taken into consideration also. You won't need to put in applications with each lendor. Talk to each lendor about your situation and their terms to narrow down where you want to apply.
You'll need a home inspection and appraisel. Your lendor will require these to be ordered directly by them. The fees can vary.
HUD loans might be a possibility. Expect more paperwork and a longer timeframe for financing. http://www.hud.gov/
If you're unable to get financing, you'll receive your earnest money back if you've met the requirements in the buy-sell agreement. You'll at least have had a learning experience. You might be able to extend the buy/sell agreement if you need more time for financing or you could exit the agreement.
Extra expenses if you do buy will be the taxes and insurance, plus home repairs. Check all past utility records to prevent any huge surprises.
- PengyLv 71 decade ago
Get the job first then see if you qualify because without it you do not. Mortgages want a verifiable employment record usually of a couple of years, here you are looking to buy with no income, and no guarantee of one just because you are graduating. More importantly how much you will be making. Graduate, get a job, make a history, then buy a home.
- Anonymous1 decade ago
There's good and bad news.
The bad news first -
You need to show income in order to qualify for a loan. Banks and mortgage companies DO NOT qualify borrowers based on future income.
The good news -
If you get a job in your field after college as a w-2, full-time employee, lenders waive the typical requirement that borrowers need to show 12 months of income. You typically only need to be there past the probation period (most places its 90 days).
- 1 decade ago
Home loans are now available to many people for whom they would have been out of the question just a few years ago. You’d be in much better shape to bargain for better interest rates if you had a more impressive credit history, but if the house you want is the deal you<!--believe it to be, a bad credit home loan can still work to your advantage.Your best bet in assuming a bad credit home loan is to pay as much cash up front as possible, and see if by doing so you can negotiate a lower interest rate.
You’ll save enough money over the term of the loan to compensate for the sacrifices you had to make in handing over the down payment.
The bad credit home loan can be a win-win proposition for both lenders and borrowers; the lenders, thanks to the higher-->interest rates, get bigger returns on the money loaned, and the borrowers get a homes in which to build equity, and chances to restore their credit records so that the first bad credit home loans they take will also be the last!
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- kettmannLv 43 years ago
Pre-qualify isn't the situation. Pre-approval or only authorized IS the situation. they are not the comparable element. Pre-authorized potential that your credit and employment has been confirmed, you're arranged to place in writing an furnish on a house because of the fact you comprehend you may purchase it. Pre-qualify purely tells you what funds to save for, not something extra and is valueless in any different case. you may comprehend in case you have weak credit or unverifible credit referrences previously you stick to Why might you furnish unverifiable referrences besides? Curious what people will do. Use your telephone invoice , gasoline/water/electric powered invoice, cellular telephone invoice, automobile charge, lease funds- in actuality something which you pay on a recuring foundation can stand to construct a credit history. to stick to, you will prefer the final 2 examine stubs, final 2-3 economic employer statements, 2 yrs on the activity and final 2 yrs W-2 varieties. If self-employed you will prefer the final 3 yrs tax information. Any unfavorable products on your credit repoort prefer a written explaination, shop it short and undemanding. Admit your blunders (however if it somewhat is) and which you found out a effectual lesson. supply the lender a reason to do business enterprise with you. ***a great situation with some self-employed people is they have a tendency to place in writing off all their earnings and teach low or no earnings, then they'd not qualify for the domicile they like because of the fact they don't make adequate funds based upon stated earnings to the IRS. in case you have surprising unpaid previous due or charged off costs you may get them paid, and be sparkling for the final 365 days to qualify for an FHA loan, and function a min 580 FICO score. Use a economic employer or a popular mortgae conmpany with in-domicile underwriting purely, no out-domicile underwriting as this is who will approve your loan. Out-domicile underwriting stinks, is overly restrictive frequently in getting approvals and gradual in acquiring approvals. In domicile underwriting lenders make judgements in domicile and in a shorter timeframe. in the event that they have table-appropriate underwriting you would be able to get a conditional approval interior minutes according to FICO scores, with very final approval subject to verifications of employment and credit. FHA is a huge way for many persons to get a house and a reliable cost, that are set via the Federal Housing administration, a central authority enterprise. wish this facilitates.
- 1 decade ago
You'd have to show some source of income. Jobs are the standard, sometimes you can use benefit amounts to qualify on. But you can't just use your reserves unless you can prove they're consistently coming in.
You may have to wait until you graduate or possibly get someone to sign as a non-occupant coborrower (possibly a parent)Source(s): mortgage broker
- Anonymous5 years ago
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- jaziLv 51 decade ago
You need to show a source of income to qualify for a home loan.....and you should show at least one full year in the same job...........how will you show you can pay your loan?
- Anonymous1 decade ago
I doubt it as no job means you wont have any money coming in and how are you going to pay it when you cash runs out?