Will this person qualify for mortgage?

Question

Serious question - person wants to get mortgage, questionable credit (late on car payments, utilities shut off, etc), will have roughly $40k to put down on $175k property; work history is only 5 months long; expecting they can get approval based on child support, which has not happened as don't have custody yet. I'd think given the mortgage melt down this person will have very difficult time, no?

Answer 1

You might be surprised . . . People are having difficulty getting high home loans like 500,000 & up due to the recent inflation of real estate value. I think that this person having 25% of the loan amount should be able to go and get a conventional loan which should give them a lower rate (of course credit is always a consideration.) 5 months experience isn't great but if they can show that they have a work history some lenders will work with you. They will probably have to write letters explaining why they were late on their payments. Hey, sometimes people fall on hard times.
Difficult yes but not impossible . . .

Answer 2

Extremely unlikely. Everyone, even those with good credit, are having a harder time getting loans right now because of the recent mortgage default rate. There is no child support to claim they receive as part of their income, and most legitimate lenders want to see at least two years work experience, if not in the same job, at least in the same field.

Answer 3

If they claim child support as part of their income, they have to show a prior history of receiving it -- like for 2 years.

If they have negatives on their credit report, they are going to have to clear them all before any mortgage company will consider approval. And it sounds like there are lots of negatives.

Answer 4

25% down will get you Hard Money loan.
Credit and job history are not an issue.