My savings can cover 20-30% down. But I am back in grad school, with savings but no income. Can I get a mortgage under these circumstances?

Asked by Bashozsa, Culver City, CA Tue Aug 30, 2011

My savings will allow me to cover a mortgage until I finish my degree and return to work. However, I have already been declined once, due to the lack of monthly income while in grad school. I understand that in this economic climate, lenders are extremely wary. I am investigating a co-signer/co-borrower as a possibility. I wonder if anyone out there has guidance to share for such a situation? Will I essentially be seen as a toxic or undesirable borrower despite substantial cash savings?

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George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Thu Sep 1, 2011
I had this conversation with my Son the other day. I told him simply, stay in school complete your education, plant your feet and when you have a least a little better indication as to what your income will be,then take the leap. Most of us in the industry aren't too worried about the prices of homes going up drastically in the near future. There's a ton of homes waiting to be foreclosed out there, they just got damned up for awhile. Don't worry, they'll be around for some time to come. If you still wanting to buy a home there are avenues (not great ones) but I have investors who loan money purely based on equity. With 30%, anyone who fogs a mirror will qualify.

Best of Luck!
0 votes
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Thu Sep 1, 2011
KinectaFCU has an "asset depletion program' - essentially $1.35m translates into $3,667/mo of qualifying income - translates to roughly to being able to qualify for a $325k sales price with a 30% down payment. Not sure how much in assets you have in order to qualify in a method such as that, otherwise then having a non-occupant co-borrower would probably be the best way for to qualify for a home mortgage. Putting the down payment from your own funds, as well as having past employment history & decent reserves after closing, will all go towards being able to help you qualify. As long as you have decent credit, you should have either conforming or FHA financing to choose from.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Tue Aug 30, 2011
Before purchasing with a co-signor, or not, consider having employment so to cover all your expenses, including emergencies; you as the borrower, need to consider the economic factors of your lifestyle that would impact on your individual comfort level of affordability. A mortgage outside your budgetary constraints can dramatically alter your overall living conditions....
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