Recent College Grad, $60,000 downpayment, possible co-signer, fha loan?

[Honestmike]

Originally Posted by BayAreaGuy87

Yes, that's what I read. FHA will forgo the 2 years work requirement if you have a job out of college that is related to your major. I don't quite understand the logic in that myself, I mean a job is a job and in this economy a lot of graduates are taking whatever they can get. Also, many majors like psychology, history, and social sciences don't have many job opportunities related to them right out of college, so many grads end up working in business, education, or public service jobs. I think FHA needs to change their policies in relation to the changing times.

These grads still have to wait a year to prove their income though, correct? What if they just show an offer letter stating $XX a year before they start?

[BayAreaGuy87]

Originally Posted by kinkytoes

I think the OP is on the right track. I wonder why he's going to get an FHA instead of a conventional loan, though...I thought FHA loans had higher interest rates...

Maybe I should go the conventional route. For some reason I thought i'd might be able to qualify more with an FHA loan. I guess now that I have a credit score and likely co-signers either way would work, right?

[BayAreaGuy87]

Originally Posted by Honestmike

These grads still have to wait a year to prove their income though, correct? What if they just show an offer letter stating $XX a year before they start?

You have to check in on that. I always thought they would have to show two months worth of paystubs to show that they have a job, and the 2 year work requirement was waived altogether.

[PG2005]

As a new grad I only needed a few pay stubs and transcripts proving I was in school the previous four years.

[Dreams2Plans]

Originally Posted by SmartMoney

OP, ask your father to add you to two or three of his accounts as an authorized user. Pick accounts that have never been late, and have little to no balance, and are over 3 years old. You should have a score within 60 days.

I was recently told (by a lender) that adding a person as an authorized user does NOT help establish one's credit anymore

Originally Posted by SmartMoney

Applying for credit cards right now will only add to the inquiries on your report and could actually result in an undesired result.

Applying for credit cards now WILL affect the score (which is non-existant), but it was long overdue - to help in the long run.
On the other side, nobody will likely issue a credit card to person with no credit (I know, I was one ), without some form of alternative credit, and even that would be hard. EVEN the secured credit cards (backed up by balance in designated account) require credit check and very likely to get denied I know, I know, that's crazy, isn't it??

Anyway, best scenario would be to talk to actual lenders (several, for second opinions), present your situation and go from there, depending on their requirements. They can tell a lot without ever pulling your report (or, you can bring report by your own checking to show). They WILL definitely need 3 lines of credit of some sort, though... might take a while to establish, but - the sooner you start!..

I love this site for checking credit score without lowering it: Credit reporting, credit monitoring and identity theft protection. (my banker recommended) It really helped me to watch and actually pre-run certain scenarios to see how some thing can affect my score!

[Dreams2Plans]

Originally Posted by BayAreaGuy87

Maybe I should go the conventional route. For some reason I thought i'd might be able to qualify more with an FHA loan. I guess now that I have a credit score and likely co-signers either way would work, right?

I am going conventional, but FHA allows for higher monthly payment as Total Debt-to-Income Ratio (since you have no other debts) - from 31 up to 43% of monthly income VS Conventional 28/36%.
With this income, your monthly mortgage payment seemed to have to be at $350-$387-$537 (as 43%, best-case scenario). Just keep in mind that those numbers should include not only actual payment & interest, but also taxes and insurance (and, perhaps, HOA fees in case of a condo, etc.)

This one helped me a lot to get a picture:
Mortgage Calculator (http://mail.uis.net/mortgage_calculator.php?form_complete=1&sale_price =150000&down_percent=40&year_term=30&annual_intere st_percent=4.75&show_progress=1 - broken link) (not includes HOA fees + insurance). Seems like you either need more downpayment or raise your income (and might as well work on credit in the mean time!)


Also, I was told that while co-borrower's income can be counted, but NOT their credit scores (just to mention).

Originally Posted by BayAreaGuy87

I have one more question.
Let's say in a week my father makes me joint account holder for 3 accounts (1 credit card, 1 utilities, 1 phone)...

After everything I went through to establish MY credit, I am doing to do this for my son as soon as he turns 18!!! (or sooner, if anybody will allow!) :-D
But not as autorized user - rather sole account holder for phone and all utilities (I'll pay), then secured credit card as soon as legally possible!!!

[BayAreaGuy87]

Originally Posted by HappyNewMe

I was recently told (by a lender) that adding a person as an authorized user does NOT help establish one's credit anymore

I was added as a joint account holder to three accounts. My father's credit card account, my cell phone account, as well my parent's utilities bill. I was told that if I apply now within 60 days I will have a credit score.

Originally Posted by HappyNewMe

I am going conventional, but FHA allows for higher monthly payment as Total Debt-to-Income Ratio (since you have no other debts) - from 31 up to 43% of monthly income VS Conventional 28/36%.
With this income, your monthly mortgage payment seemed to have to be at $350-$387-$537 (as 43%, best-case scenario). Just keep in mind that those numbers should include not only actual payment & interest, but also taxes and insurance (and, perhaps, HOA fees in case of a condo, etc.)

This one helped me a lot to get a picture:
Mortgage Calculator (http://mail.uis.net/mortgage_calculator.php?form_complete=1&sale_price =150000&down_percent=40&year_term=30&annual_intere st_percent=4.75&show_progress=1 - broken link) (not includes HOA fees + insurance). Seems like you either need more downpayment or raise your income (and might as well work on credit in the mean time!)


Also, I was told that while co-borrower's income can be counted, but NOT their credit scores (just to mention).

However, if when I am applying for a mortgage I have my parent's income combined with my income and credit, than I could qualify for much more than just a 500 dollar a month mortgage, right? That's what I was under the impression from the other people in this thread. If I was just to apply with my own credit and income alone, making 1250 a month or so, I would then only be able to qualify for at most 43%, and that's like a 400-500 dollar a month mortgage when you include the taxes and insurance. Does this sound right?