How hard would it be for a 19 year old to get a mortgage loan?

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I’m 17, will be 18 in June, but my fiance of 2 years is 19, will be 20 in the fall. Recently I found out I was pregnant. We’re looking into renting, but I can’t help but notice all the home auctions and short sales due to the economy. Using loan calculators, I figured out that if we could buy, we would be saving about 400 dollars a month. (900 a month for rent vs. 500 a month for mortgage). It would definitely be worth putting our money into an investment also. What is the chance that a 19 year old could get approved? The homes we’re looking at are actually around 70k but we wouldn’t go over 90,000. All the homes are either an auction due to being foreclosed on or a short sale. He has one credit card, with no where near the limit on it and makes the payments before he even gets the bill. He hasn’t had the card for that long though.He’s had a checking account since he was 16 and has overdrawn twice, but only by a few dollars. He has a pretty decent part time job, and is getting another full time to go along with it. I graduate in about 4 weeks, at which time I’ll be getting a full time job, though I don’t think I can be a co applicant due to my age.
Well, he hasn’t had his job for 2 years, only 1 1/2. That’s the part time job though, he’s pretty much guaranteed a full time job to go along with that. I’m not emancipated, but we are going to be married soon, so does that qualify me to sign? We do have enough money for a down payment and closing costs. He has about 20k in matured savings bonds, and I have about 5k saved up in the bank.

  1. Reply
    April 29, 2011 at 10:47 pm

    It’s a little too soon for you, but good to plan ahead. Sounds like you two are starting right, if a little too early.
    Now you need stable job history of at least a year, down payment of 3.5-5% (10% down is better), and good credit, to get a loan. Rent, save and build credit. Take a personal finance class at local community college.

    Auction and shortsale homes require lots of patience. YOU get pre-approved and have mortgage ready to go. Shortsale requires that your lender and seller’s lender both approve you. You need down payment and closing costs, and to avoid overextending yourselves. Most common mistake of first time buyers is overextending themselves.

  2. Reply
    April 29, 2011 at 11:25 pm

    There are many first time home buyers programs available in your city or county. You should check with your city’s or county’s Housing Department. They will have all the information you need as well as a list of lenders that are authorized to do the loan programs for the city.

    A part time job will not suffice, you or your boyfriend will have to have full time employment for at least two years.

    In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

    Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.

    He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

    The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

    When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

    #1 One month of pay stubs for each person that will be on the mortgage.

    #2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

    #3 Two years of federal income tax along with the W-2 that match.

    Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

    Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

    Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

    If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

    You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

    Make sure your mortgage broker explain all your options so you may make an intelligent decision.

    What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

    So select the best option for you and your financial situation.

    You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

    Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

    Your mortgage broker will now order an appraisal to show proof of the property value.

    The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

    After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

    Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

    I hope this has been of some use to you, good luck

    “FIGHT ON”

  3. Reply
    April 30, 2011 at 12:23 am

    great question. It may work out but the problem is he is 19 and the part time job just doesnt cut it as he must have had the same income for the last 2 years from the same job. You can only sign when you turn 18 or if emancipated by your parents in court. The problem is not the credit as he has probably no scores if the card is new and it takes 12 months to get a rating any how. The checking account is nothing in all of this. Have you guys saved up down payments? 3.5% is required FHA now and what about closing cost? Do you have reserves? if so how many months? (6) Is what I suggest as you will deliver and take some time off. What about set aside emergency funds that are use only for the direst emergency’s and the replaced. It takes more than meeting the monthly note to be home owners. Based on the question as a mortgage professional I would not take your account as you would be 1 pay check away from foreclosure with the best of intentions it sound harsh but look the facts in the mirror you aren’t ready to assume this task yet. Save up and get prepared to own as it makes life so much better when you are
    Also get married before you buy any home. I see so many post here about the break up and he or she wont sell or I cannot get out of this or my ex threw me into bankruptcy or my ex foreclosed and now they want me to pay. On and On and On
    Good luck Stay healthy and take care of the new baby when it comes and love each other
    I am a mortagge banker in TN & KY

  4. Reply
    April 30, 2011 at 12:36 am

    Yes you can, but it always depends.
    1) Do you have an excellent credit score, if not focus on fixing it first, you will not get a loan.
    2) If you can’t get a loan, you could if you get a co-signer, and it has to be someone with excellent credit, and good assets – because they will be signing up and be responsible for the loan. Typically this is a family member. If you don’t have good credit, and can’t get a co-signer, work on it for two to three years, save, and try later. Remember, a co-signer is taking on responsibility if you don’t make payments. So they have to check your credentials as well.
    3) Plan on 20% down. You might get away with less, but if you can’t afford 20% down, you should not get a house.
    4) Use the old rules, no house payment should be more than 2.5 times your income. Forget what other mortgage lender tell you, stick to this ratio. Keep your total debt to less than 38% of your income, including your house payment.
    5) If you buy a house, don’t go out and buy a new car, a new boat, etc. This is my formula for foreclosure.

    It will be difficult for someone at age 19 to get a loan, as you have little for a down payment, and your credit score has to be excellent. If you can pull it off, do so. If not, focus on building good credit, pay all bills on time, and build up a down payment.

  5. Reply
    April 30, 2011 at 1:01 am

    Without a full time job not going to happen. In addition did you take into account the insurance and taxes on the place in its price? Plus the upkeep? Seriously would rent until your relationship is farther along, as in married as it gives protections to both of you. Then again he will have been working full time for awhile, another note is what the income is the higher the better. Easy to save money staying at home, hard when you have to pay all the bills associated with owning a hime

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