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Getting a Mortgage at the age of 20-21

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Anonymous
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Getting a Mortgage at the age of 20-21

Hello to everyone in the MyFico Forums!

 

I am 20 years old and looking to purchase a home in the next 1-2 years. However, I have a few questions as to what I should expect. 

 

1. Can I expect to be approved using the 'normal' mortgage application process, i.e. a bank, credit union, or mortgage broker, or will I be better off with a HUD lender?

 

2.  If I'm going about the standard process, what would be more beneficial - mortgage broker, or bank/credit union?

 

3. With my income, is purchasing a home really going to be an affordable option? My income is listed below, my father recently purchased a 3br/2ba for $112,000 in the same area so I am thinking $100,000 to $125,000 is my range for a reasonable home.

 

4. Are there any 'First Home Buyer' programs that may be beneficial to me?

 

5. Is it possible lenders will take my age into consideration in the application? Will my age make me be considered a higher risk? 

 

6. What else can I do to prepare for this? 

 

 

Now, for the juicy info you guys would need to help me out. 

 

Credit Scores:

FICO: 674 

Experian: 701

Transunion: 715

 

I expect these to improve before I apply for a mortgage.  

 

The loan for my motorcycle is a revolving account (credit card type) and it shows up as maxed out, the FICO simulator says that after I clear that up my FICO score should be between  764-804. I plan on having this paid off within the next 6 months.

 

I have 2 credit inquiries that show up on my account from the past 12 months, however by March 2010 they will be older than 12 months old.  

 

I have 4 accounts listed. The oldest 2 accounts are 2.7 years old, and will be a little over 3 years old at the time that I plan on apply for a mortgage. 

Never missed a payment. 3 of the accounts are revolving accounts ( 2 credit cards, $0 balance, use 20% of limit and pay in full each month, other is loan for motorcycle). The fourth account was an auto loan I opened with my credit union for about $4,000, and paid off within 6 months.

 

No debt collections on my report.

 

Income: 

 

I work full time, and I am a full time college student as well. My income comes from my hourly wage from employment. Before taxes that amount is about $27,000. I am in Florida so I do not have any state income tax to worry about. 

 

Employment 

I have been employed with my company for 1 1/2 years, at the time of applying that would be a little over 2 years of employment with this company.

 

Monthly Debt Payments:
I plan on having $0 in debt at the time of applying for my mortgage. My motorcycle loan is the only debt I currently have. 

 

Assets:

Approximately $3,000 in my 401k, however I have stopped putting money in there in order to set aside money for a downpayment. For tax penalty and repayment costs, I would prefer not to use any of my 401k money for the purchase of my home.  I should have about $10,000-$12,000 in my savings account at the time I am applying for the mortgage.

 

Property, Location, Value, Occupancy, and Transaction type:

 

I am looking to purchase a home (Primary residence) in the Seminole County, Florida area. It will be a suburban area, either as a family house, or a condo or villa. My price range is $100,000-$125,000. My down payment will most likely be about 10% of the value of the home.

 

I appreciate any insight or information that you can give me. This has been a goal I have had for a few years, so I have been trying to prepare for awhile. As the goal "deadline" is nearing, I am trying to make sure I have got everything done right.  

Message Edited by rabeatz on 10-31-2009 04:22 PM
Message Edited by rabeatz on 10-31-2009 04:23 PM
Message 1 of 2
1 REPLY 1
BrianB_The_Loan_Professor
Valued Contributor

Re: Getting a Mortgage at the age of 20-21


@Anonymous wrote:

Hello to everyone in the MyFico Forums!

 

I am 20 years old and looking to purchase a home in the next 1-2 years. However, I have a few questions as to what I should expect. 

 

1. Can I expect to be approved using the 'normal' mortgage application process, i.e. a bank, credit union, or mortgage broker, or will I be better off with a HUD lender?  You should be fine for either

 

2.  If I'm going about the standard process, what would be more beneficial - mortgage broker, or bank/credit union? Either would be fine unless the credit union does not offer certain programs like FHA etc

 

3. With my income, is purchasing a home really going to be an affordable option? My income is listed below, my father recently purchased a 3br/2ba for $112,000 in the same area so I am thinking $100,000 to $125,000 is my range for a reasonable home. It will be close but if you have no other debt at the time you should be fine

 

4. Are there any 'First Home Buyer' programs that may be beneficial to me? Not really this is something that is discussed a lot but there are not a lot of programs geared just for FTHBuyers if there are they are usually local and you will have to search them out

 

5. Is it possible lenders will take my age into consideration in the application? Will my age make me be considered a higher risk? ThatThat would be illegal as it is a form of discrimination Most think of age discrimination as being for the elderly but it is also for the younger borrower as well

 

6. What else can I do to prepare for this? 

Get more income coming in work on the credit some but it is fine you mainly need the work history

 

Now, for the juicy info you guys would need to help me out. 

 

Credit Scores:

FICO: 674 

Experian: 701

Transunion: 715

 

I expect these to improve before I apply for a mortgage.  

 

The loan for my motorcycle is a revolving account (credit card type) and it shows up as maxed out, the FICO simulator says that after I clear that up my FICO score should be between  764-804. I plan on having this paid off within the next 6 months.

 

I have 2 credit inquiries that show up on my account from the past 12 months, however by March 2010 they will be older than 12 months old.  

 

I have 4 accounts listed. The oldest 2 accounts are 2.7 years old, and will be a little over 3 years old at the time that I plan on apply for a mortgage. 

Never missed a payment. 3 of the accounts are revolving accounts ( 2 credit cards, $0 balance, use 20% of limit and pay in full each month, other is loan for motorcycle). The fourth account was an auto loan I opened with my credit union for about $4,000, and paid off within 6 months.

 

No debt collections on my report.

 

Income: 

 

I work full time, and I am a full time college student as well. My income comes from my hourly wage from employment. Before taxes that amount is about $27,000. I am in Florida so I do not have any state income tax to worry about. 

 

Employment 

I have been employed with my company for 1 1/2 years, at the time of applying that would be a little over 2 years of employment with this company.

 

Monthly Debt Payments:
I plan on having $0 in debt at the time of applying for my mortgage. My motorcycle loan is the only debt I currently have. 

 

Assets:

Approximately $3,000 in my 401k, however I have stopped putting money in there in order to set aside money for a downpayment. For tax penalty and repayment costs, I would prefer not to use any of my 401k money for the purchase of my home.  I should have about $10,000-$12,000 in my savings account at the time I am applying for the mortgage.

 

Property, Location, Value, Occupancy, and Transaction type:

 

I am looking to purchase a home (Primary residence) in the Seminole County, Florida area. It will be a suburban area, either as a family house, or a condo or villa. My price range is $100,000-$125,000. My down payment will most likely be about 10% of the value of the home.

 

I appreciate any insight or information that you can give me. This has been a goal I have had for a few years, so I have been trying to prepare for awhile. As the goal "deadline" is nearing, I am trying to make sure I have got everything done right.  

Message Edited by rabeatz on 10-31-2009 04:22 PM
Message Edited by rabeatz on 10-31-2009 04:23 PM

 

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Brian B The Loan Professor
Mortgage Banker - offering FHA, VA, USDA , and Conventional mortgages in all 50 states -

If I do not respond to a follow up question please feel free to contact me directly
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