Do I have a chance getting a mortgage?

[Bella1980]

I really need some advice as to if I will even qualify to buy the house. The home I am trying to buy is $49,900. I have $20,000 to put down, possibly $25,000.

However, my income is not that high. I recently graduated from grad school and my income on my taxes last year was $7800. This year I have made more money but I am freelancing and so I don't know how that will look to a loan officer.

I am also going back to school in the fall but will still be freelancing. I would really really like to be able to buy this house.

My credit scores are currently 640/650's but all my credit card balances are high. I am paying off all of my balances at the end of this month and anticipate my scores being high 600's/700's.

The house has been on the market for over a year and the price keeps dropping, it was a foreclousre in an area with a lot of foreclosures.

1. Will I be able to get a mortgage with my income? If not, what can I do to try and get this house. I want to buy it in August if it is still available!

I would be a first time home buyer!

[Bella1980]

Please let me know if I have a chance.

[cdtotten]

Heres the problem. Since you are self employed, they will typically take the past 2 years tax return income and use the average. If that number is around $8k, that would only give you $667/month, which wouldn't qualify you for that home. You will need to show consistent income for a while before you are able to buy a home.

That being said, if you are going to put $20k down on a <$50,000 home, I sure wouldn't amortize it over 30 years.

[Bella1980]

So I have no shot?

What if I had $35,000 to put down?

This property was owned by my mom who went into foreclosure, for $110,000 and the price has dropped. My mom is essentially homeless now (living with relatives) and I am moving back to the area. So I thought it would be a great way to get me a place for me and my mom.

I am trying to get it now because who knows if the house will still be available in 2 years and at 49K.

How much loan would I qualify for with:

2009 Tax return- $7500

2008 Tax return- $10500

I was in school during this time period, graduated in 2009, freelancing in an area related to my degree now. Making about $3000 a month.  I don't want to wait 2 years for this property as I don't think it will still be available.

Do you think I should try and postpone going back to school? (I recently got accepted into an IVY league school for an advanced degree to make me more marketable, it's the top school in the country for what I want to do BUT I really do want to try and buy this house).

Looking at my income from the past two years, the average is about $9000, what is the total loan I could qualify for?

[Anonymous]

you will not qualify for any mortgage for a couple reasons...

job history (self employed income must be shown for 2 full years before they can count it)

Income level (not enough income to qualify for the home)

Small mortgage (banks do not do mortgages for 20-30K.  50K is usually the minimum for a mortgage and some banks it is much higher.

Your best bet is to find a local bank that can loo at your entire picture and possibly give you a protfilio loan that they hold in house (not a general mortgage loan that has to fall into investor standards.  That is probably your only shot short of attempting to take out a straight personal loan/signature loan.  The key here is fiding a local bank that is willing to do these type loans.  A smaller bank or a local based CU is your best option.  Wait until your credit scores update with the paid balances though becuase I doubt they will even consider it until you are close to the 700 mark  (680 or more at least I would guess)

[Bella1980]

Thanks Mickie.

I forgot to note that I also have a paid job as well. Would that help? It is only part time but is an extra $1000 a month and is documented.

I didn't realize I couldn't get a mortgage for only $20,000. Thanks for telling me. That sucks!!

I guess I will try getting a regular loan or saving up the full amount (will the rate for a reg loan be a lot higher?)

[Anonymous]

whether you find someone to do the loan as an in-house mortgage or a personal loan, it will be at a higher rate.

One thing you could look into that I had forgot about is a hard money lender.  They are basicly investors that use their own standards rather than bank standards.  you usually need 40-50% down but that seems a possibility in this case.  I do not know the specifics personally, but if you put up a post asking about them, you may get an answer.  They will be pretty expensive though as far as rate goes.  But, bottom line, if you can not afford the rate on the house when you are only looking to borrow 20-30K, you probably can not afford the house.  In a case like this, if I could not pay it iff in 5 years, I would not do it.