Question by doesnotexist1: How much interest rate would I get on my mortgage loan and how much would I pay monthly given my situation?
I am a 24yo med student in Chicago looking to buy a condominium. As a student, I have no steady income but do have around $ 30,000 available for a 10% downpayment. My credit score is 760. Can I get a mortgage with a reasonable interest rate given my credit score and lack of steady income and what would that rate be? I plan on purchasing a condo and renting it out for 2-3 years and using the rent to supplement monthly mortgage until I have a consistent income high enough for me to move-in myself. What steps must I take to fulfill my plan of first time home ownership?

Best answer:

Answer by W. E
Your credit is good – the income is the problem – You could go “stated” income – With a stated deal, the Broker computes a income rage in for your type of job. The underwriter calls and verify’s your job – but does not ask for income from your employer. You may also look into interest only for 5 years at a fixed rate. This will lower your payment, until you are done with college – or you can get a fixed rate for 30 years, you will get a good rate – but going stated, the rate will be slightly higher.

There are also djustable loans, option arms (where you pick the payment, from 4 payments, including interest only). And as I mentioned eariler, the Interest only give you a lower payment, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount

Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now – (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 – This is just a estimate – ok –

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help – especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a “hard” pull and it drags down your credit score.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only – not the final – but it does help you figure things out.

Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency’s and other useful information.

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