Grad student – am I a good candidate for a mortgage?
Posted in Renting & Real Estate on 08/01/2010 07:04 pm by admin
I am 23, turning 24 this year. I am a PhD graduate student and will be for another 3-4 years. I am paid a stipend of $24k/yr and my tuition and health insurance is covered as long as I’m in school. My FICO is 760. I have $16k in student loans from undergrad that are currently deferred until I’m finished with school. I have no credit card or consumer debt, never had. I have $4k in retirement funds and $2k in an emergency fund. My savings account should be up to $6k by December, unless something goes wrong. All this I have saved from my measely income for 2 years. I also own my car outright, paid for in cash. (In that timeframe I’ve also covered moving expenses and an apartment full of new furniture + electronics.) So I would say I’m pretty good with money for my age.
My current rent is $675, nothing included. I’m wondering if it is smarter to buy. I will stay in the area for another 3 years, perhaps more if I decide to stay and work here after graduation. I have a good FICO score so I think I would get a reasonable rate (5.0%?). My credit report shows 5 years of history, all my accounts are in good standing, nothing negative. My available credit limit is approx. $10k and I never carry balances. In my area, I can get a 1bd/1ba condo for $100k, HOA fees approx $150/mo. If I apply for a 30yr mortgage, according to the calculators my monthly payment can range $530-730. I will only have the $6k from savings to put down though. But with Obama’s $8k incentive…. do you think I should even be thinking about buying? I would just really like to have a “home” and not have to apartment-hop after every lease due to management, move furniture, not allowed pets or this or that anymore.
Would they even look at me if I walked into a bank to ask about my loan eligibility?
TIA. Advice from loan officers or those experienced in mortgages are greatly appreciated!
I want to add that I would do the FHA.
Antonio
08/02/2010 at 2:15 am
Daniel
Well see
I found it on answers.yahoo.com hope it resolves.
08/04/2010 at 2:07 pm
Jerry
In my personal opinion, I would wait until my degree was completed. That worked the best for me. I rented an apartment for three years, until I made associate professor. Then, I financed a house with money I had saved over the previous three years. It also gave me time to start paying down my student loans. Though, if you think that you can pull it off, and you happen to be a Business grad student, then go for it. The housing market is at an all time low.
08/07/2010 at 7:20 am
Ethel
If your only income is the $24K, the most you can possibly receive approval for is $75K mortgage (rule of thumb – three times your gross annual salary). The FHA on the $100K would require $3,500 down, leaving you with $2,500, which is probably not enough to cover the closing costs, which are another 3 to 5 percent. Thus, you would have to dip into your emergency fund – which would also mean disqualification from many lenders since they want two months of expenses in an account and not used toward the purchase.
In all honesty, your finances, while very good for your current situation, really warrant waiting until after graduation for buying a house.
08/09/2010 at 6:40 am
Hector
You can ask but you need 2 years work and tax returns to prove it, yes you are doing good but in school with no work record so they will look at it as yes it is good now, but what of the next year or so