I am 19 years old, i have a credit score of 702, and i make about 1500 a month but i get paid in cash. I can make a 5% down payment. Can i get a home loan for 40,000 to 50,000?
2007-12-23 09:08:24 · 7 answers · asked by antioneitis 2 in Business & Finance ➔ Credit
Absolutely. You are considered a good risk. But if you are going to do it, do it soon. The laws have been changing in such a way that it is harder to get 100% financing. With 5% down, you would need a creative financing option, but they are still available. Go to a mortgage "broker", not a bank. It will up your chances of getting a loan and get you the best rates.
Lendingtree.com is excellent for comparing rates.
Hope this helps.
2007-12-23 09:13:35 · answer #1 · answered by E.T. Barton 5 · 0⤊ 3⤋
While anything is possible, you have a few things going against you right now.
1. You get paid in cash. So if this is not verifiable income it is going to be hard to find a lender to approve you.
2. You are only 19 so at most you have just over about a year of credit history. Most lenders like at least 2 years of history before they will even consider you.
3. You have not said what this history is made up of. If you have 1 credit card that you have paid off 8 or 9 times the score means nothing. Lenders like to see a balance of credit, so a few credit cards and a loan or two will go a long way.
Now to your advantage is that if your income was verifiable you should be able to qualify based on that as long as you do not have many other expenses that would knock your Debt to Income Ratio too high. So for now you should do what you are doing, and you will be in very good shape in a year or so.
2007-12-23 17:20:00 · answer #2 · answered by OC1999 7 · 0⤊ 0⤋
It seems as though you are on the right track with being responsible with money. However, I would get a job that pays with checks. Furthermore, when purchasing real estate, you really need to have 20% or you will have to purchase Private Mortgage Insurance, which basically protects the bank in a foreclosure. Since you do not have a 20% downpayment, that may also put you at risk for a higher interest rate or a variable rate.
Furthermore, go to a bank that cares more about your personal history than a simple credit score check. Called "manual underwriting," this process looks at your job history, residence history, and checks to see what debts you had the past and how they were paid. This is probably how your grandparents and great grandparents purchased their homes.
Don't be in a hurry to buy a house. Rent until you are sure you can afford it. I am 24 and plan to rent until I am able to do the home buying thing the correct way.
2007-12-23 17:51:26 · answer #3 · answered by coolman293472 2 · 0⤊ 0⤋
depends on what makes up the 702, one card with a 6 month history will generate a 700 score, if paid on time but wont get you a mortgage, what is mid score of 3 bureaus and what compromises your credit history. second you better be able to prove your income with a w2 for at least 2007 and better yet 2006 same type of work. what is your debt structure if its over 40% monthly u r out of luck with 1500 a month that means 600 for total bills- less home owners insurance say 70 a month property taxes 75 a month now u r down to 455 a month. lets c 45000 loan at 6% for 30 years principal and interest is 270 so that leaves you 185 for credit cards loans and car payments does it work you need to do the math and figure it out. STAY AWAY FROM MORTGAGE BROKERS, SEE A LOCAL BANKER AND POSSIBLY WORK WITH FHA OR THE USDA RURAL HOME LOAN PROGRAM. BE CAREFUL, GET THE BOOK "HOME BUYING FOR DUMMIES" AT THE LOCAL BOOK STORE, BE EDUCATED AND PROCEED WITH CAUTION
2007-12-23 17:25:49 · answer #4 · answered by donald e 4 · 0⤊ 0⤋
Show them your tax return and pay stubs it shouldn't matter if you are paid with cash or a check it is all taxable income. If you are self employed you will have a 1099 and report it on form SE for SS and Medicaid. If your 1500 is gross and self employment you may not have enough profit to qualify. If you are evading taxes they shouldn't loan you anything since you have a huge liability.
2007-12-23 17:27:37 · answer #5 · answered by shipwreck 7 · 0⤊ 0⤋
I'm 100% with you on all of your qualifications EXCEPT for the part where you say you get paid in cash.
I assume that means you don't have a verifiable source of income - like paystubs or a W2?
Without a verifiable source of income, the answer is no.
2007-12-23 17:14:06 · answer #6 · answered by Stuart 7 · 1⤊ 0⤋
yes, call your local FHA. you may get a special rate
2007-12-23 17:37:14 · answer #7 · answered by beckoningsubstitutes 5 · 0⤊ 1⤋