So I've been living alone in a home owned by my mother, and she would like to sell me the home, using gift of equity to complete the transaction and cover the downpayment.
This seems like a somewhat uncommon method, and I am a young borrower, so I have some questions regarding my qualifications.
My details are as follows:
- 24 years old (will be 25 in several months).
- My job is a guarenteed SALARY position earning $52,000 per year with a company that has employed me for almost 10 years (obviously I have not been earning 52K for 10 years, I have had that salary for almost 2 years).
- My credit score (according to free credit report.com) is 738. I have no bad marks other than a 2009 comcast account which went delinquint when I moved at one point. I did not receive the bill at my new address (thought I was paid up and the account was closed), and was not aware of it until it showed up on my credit report. I paid it off immedately when I was alerted to it, and have documentation proving such. This only shows up on my Experian report. The total bill was $400 and change. Again, this has been taken care of, but it is the only remotely negative mark on my credit.
- Credit Experience: I have successfully paid off a $28K car loan which I obtained at age 18, and had no late payments at all. I also have a $2,000 capital one card, which I rarely use, but also have perfect payment history.
- I have NO debt of any kind (besides maybe less than $1,000 on my credit card).
The House details:
- The home has a town tax assesment value of about $370,000. Based on recent neighborhood sales of significantly lesser homes, I beleive the house would easily appraise around $450,000+. (This is by far the nicest home in the neighborhood, it almost looks out of place).
- The current mortgage has a principal balance of $203,000. so there is about $200K+ of equity in the home.
- The taxes are about $475 per month, or $5,700 per year.
- The home is located in Massachusetts.
My mother is willing to sell me the home for what she owes on it, but at this time I do not have enough saved for a 20% down payment, and having a co-signer is not an option.
With all that said, is this a realistic proposition for me to be approved?
If so, what is the dollar amount that the bank will need to see in my savings account as "back up"?
Also, would it be best to go to a local bank as decisions are more personal and made locally? Or are Mortgage Brokers, or mortgage specific companies the better option since they might be more creative in structuring a deal that would work for my situation?
I just don't want to start walking around applying and getting denied, thus hurting my credit. So I want to get some insight from those "in the know" as to if I could even get approved, and what I should be prepared to have ready. Being young, I've always just assumed I would be denied. However an indiviudal I know just bought a 200k home and he makes significantly less ($16/hr) than I do, and had no credit history. That got me thinking that this may be feasable for me...
Thank you very much in advance for any insight into this!! Any help is appriciated.
ALSO - I should ask, my girlfriend of 3 years will be moving in with me soon and will be covering all the utilities. However, I'm assuming that since we are not married, and she would not be on the mortgage, the bank does not consider this as part of the overall picture. Am I correct in that thinking?
