Is it possible to get a mortgage before I start work if I have debt?

Asked by christopheraflowers, Snellville, GA Tue Jan 8, 2013

I received a MAcc degree from UGA. I have a signed offer from a large accounting firm in Atlanta. I have around 20k in debt and just got my first credit card two months ago. I want to have a house by October. I will have little for a down payment. Is this possible?

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Francis Rolland’s answer
Francis Roll…, Agent, Los Altos, CA
Tue Jan 8, 2013
Yes Christopher it is always possible (nearly) to get a loan, but it would be a lot more expensive than otherwise. This is really a question that is best answered by a lender, either a bank or a mortgage broker. A mortgage broker will have all kinds of choices of lenders that he/she would be able to tap into. It is probable some some lender will do it with your parameters. But as I say, if if is unusual, or harder to find, it will cost more. So, do not despair, and just look at the best possibility out there.
Good luck to you,
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Tue Jan 8, 2013
Hi Christopher. Debt itself is not a barrier to getting a loan. In fact you NEED some debt! Or rather *history* of debt *and* history of repaying it to get another debt, i.e. a loan. I'm assuming that your 20K debt is actually student loans. The important thing is not the amount of debt, but the monthly payments, and their ratio to your gross income. This is known as DTI, or debt-to-income ratio. It's also good that you have a credit card. This will help build your credit history. Ideally however, you need 3 "trade lines" which can be credit cards, auto loans, mortgage, store cards (not as good) to get a mortgage, and ideally with at least 12 months, and preferably 24 months history. You will also need at least a 12 month documented history of rent payments. You will also need 1 month's paystubs from the new job. Your best bet would be an FHA loan which is backed by the government and is tailored for 1st time buyers like you. You will also need some cash in the bank! Minimum of 3.5% downpayment for FHA.

So as you can see there are quite a lot of requirements for getting a home loan! Assuming you will be buying in Atlanta, you should find a reputable mortgage broker there and start talking to him/her from now so you can find out exactly what you need. They will also be able to connect you with a reputable Realtor who can help you with house prices.

I can't help you get a loan in GA, but I'd be happy to talk thru the general requirements.

Best of luck!

Tony Lacy-Thompson
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Terri Vellios, Agent, Campbell, CA
Tue Jan 8, 2013
I suggest you talk with a lender and have them review your debt, expected income, credit scores, and amount of cash and reserves. With that they will be able to give you a more accurate picture of how you can position yourself to purchase a home.

Have an amazing day!
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