Looking for a mortgage, but have some questions?

Question

Hey all, I am a college student and I am looking at buying a house next year instead of renting. My parents and I are looking at houses but worried about being able to get a mortgage. Heres some info/comments/concerns.
I have 30k for a down payment.
2. My parents will cosign.
3. My parents own their home.
4. They have a home equity loan on the house, due to my dad being layed off a few years ago due to the .com bust.
5. Right now I do not have a "steady" job, I restore cars for customers, paint vintage arcade games for a museum, and also build cars to sell.
6. My monthly income varies from 500-5000 a month, it all depends on how much work I agree to do, and I would be able to do a lot more if I had a garage to do the work in.
7. For equity I have one vintage car that is worth 35k and a Muscle car that will go for 80-100k.
I would have about 5 roommates, and the going rent in the area is 500/month. Homes in the area are anywhere from 300-500k. What I would like to do is have a mortgage payment in the 2000-2500 range (or less) (which is equal to 5 roommates at 500/month) and then I would pay for the taxes/upkeep/insurance. I would keep it for 5 years.

I would really like to be able to buy a house in the area because the appreciation rate in the area is 18%, and I would really like to come out making money.

Whats my chances of being able to get a mortgage?

Answer 1

In theory it looks pretty good for getting the loan considering the collateral you are offering; however, the need for five roommates is the scary part. I work in an office where five people couldn't even agree on ordering a pizza let alone living together. Consider a two bedroom condo with one roommate and then upgrade. Good luck with the plan but wait til you're out of college to become a landlord. Alot can happen in your five year plan that will leave you with a house you cannot afford on your own. It's great that your parents will co-sign and offer their home as collateral but think of a two bedroom condo that will be easier to bail out of if need be.

Answer 2

You left out one important piece of info: Your credit score. If you have a score of 600 or better, you will be able to buy a house. (based on today's criteria, mind you ~ things change..) You will use a program called either "Stated Income" or "No Income". Keep your downpayment money in the bank so the bank/lender can see you have had it for awhile. Keep as much as you can and make as many deposits as you can in the bank (rather than keeping cash your customers might pay you, deposit it in the bank then withdraw it as you need it).

Try to build some credit between now and then, a car payment, small credit cards, or get put on your parents cards as "authorized user" (only on accounts rated as good)

Answer 3

Being able to do what you're describing is doubtful.

Mtg companies Can do things for people that miss on one of the three qualities they're looking for.
1 - good credit
2 - good debt to income ratio
3 - job stability
Having your parents co-sign for you is a nice thought, but what do they have to offer the lender? You said you're dad's work isn't great right now, and their house already has a home equity on it. His debt to income is probably already stretched. How is his credit at this point?
Your income.... how much does the IRS say you've been making? Future "hope to be rental income" isn't what the lenders look for.
If you sell the cars and use that for a down payment, then maybe.
Sorry to sound pessimistic, but I hate seeing people get into "pie in the sky" schemes and get foreclosed upon.

Answer 4

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