Mortgage with little or no income

[james1989]

Hypothetical here -

An individual has $50,000 cash and is attending university.He is earning < $1,000/month. The housing market takes a major downturn and this individual wishes to purchase a unit costing anywhere from $100,000 -$ 200,000 putting about $15,000 down.

Will the bank give a mortgage to this individual?

Does it help that he has 30,000 in the bank or do they not consider this?

I'm assuming it matters whether the individual plans to live in the unit or not... to what extent and how does this matter ?

Could you get someone with larger assets to co-sign the mortgage?

Thanks,

James

[Four Pillars]

Hypothetically, this person should check with their bank to find out.

[the-royal-mail]

University students should not be involved with RE. That is a volatile time of life. The focus needs to be on understanding the material they are paying to learn. Save the money to graduate debt free - plus it will be needed to get started in life, move to new town etc. You simply do not know where you will end up after graduation. Tying yourself down to such an asset is a very bad idea.

Again, this is the time to SELL if you want to make money in RE. This is a very bad time to buy.

[Just a Guy]

Four pillars is right, you have to ask a bank. Of course they will probably say no, but that doesn't always mean no. You could ask a different bank, or even the same bank, different person, and get a different answer. A mortgage broker may help...

As for Royal's answer, you should also bear that in mind, however, like any investment, there are always a few good deals around in any market. If you can find one great, but lately it's been tough. I waited several years to find some good deals, but have been finding a few lately...it depends on which market you're looking in (there is RE outside toronto and Vancouver).

Of course, there is always a mortgage to be found as well, but make sure it makes sense. Getting a 10% mortgage with today's rates may be a good sign that one shouldn't be getting into real estate.

[Chris L]

They would need to prove they could carry the cost via income. This could be done via signed lease (to friends, etc.). The purchase would be a speculative move, however. Not recommended in today's market. If a downturn does materialize, it could be years before a sale is possible.

[crazyjackcsa]

Give your head a shake. Hypothetically. If you want to carry that kind of mortgage, you'll need to show about 40k of income.
You don't want to live it in? Really? Speculate much?

[marina628]

You will probably get a $70,000 mortgage on your own assuming no debts .

[bigbadbull]

I agree the market right now may not be the cheapest but I'm assuming this person is looking to buy an income property which they plan to rent out to their university pals (pretty darn good idea), depending on which year this person is in I'd say they know enough students at their school to keep that rent coming in for the next couple years easy. . . that said, if you get approved my wishes with be with you, just make sure you have the cash flow to cover all those hidden RE fees. .

[crazyjackcsa]

Pretty terrible idea. He's going to juggle school and an investment property? An investment property that deals with students, and he isn't going to live there? Brutal plan. Specuvesting at its worst.

[bigbadbull]

how can you judge this person without even knowing their abilities? I'm assuming their max age is ~22 and to have accummulated $50K by then is quite an accomplishment, it also implies that they may have a decent work ethic and at least half a brain (more than most people could say)