i'm a young adult, and im really looking for ways to help pay for my tuition......
basicly, i'm interested in investing in some properties, maybe taking out a loan, and buying a small house. and renting it out
basicly, what i'm just wondering......is....
1) is there anything (law-wise) that stops me from being able to do something like that?
2) loan-wise, will banks not even take me serious, because
----i'm not that old
----i don't have that much credit built up yet
3) how easy/hard would it be for me to take out a loan to purchase a apartment/condo/duplex???
anyways, it was just a idea, but i'm seeing how hard it would be to fullfill it
thanks to those who can help -there is nothing (law-wise) stoping you from buying property, if you are ten years old and have a million dollars, then you can definitely buy yourself a property...
same way as buying a candy from a store, but if you don't have any money, then that would not be the case since you would need to borrow the money from someone else...in this case you would borrow it from a bank..unless you know a millionare and that person would lend you the money (completely different lenders)...
a bank usually requires you to have good credit, if you don't have good credit, don't get your self in big trouble...
If you already have credit, try to keep it above 720, it is very hard to maintain, but not impossible...don't go over 25 percent on your credit cards, pay on time, and don't buy anything to expensive if you cannot afford to pay the net cost plus interest....
-You might also need to have a good and clean record with the credit bureau...as mentioned before, try to keep yourself from damaging your credit...some banks might ask for several active credit lines, others might ask six-to twelve months of bank statements, others might as for prove of employment...it all depends on which bank you are working with, (don't forget that your credit has a major impact on all of these documents....the better the credit score, the better you have a chance to get a loan and the least paper work)
---are you making a good amount of money? well, usually it is recommended that your mortgage payment shall not exceed over 45 percent of your monthly income...
-first time home buyers can get much greater loans now-a-days, up to 100 percent in some cases... again, your credit score will determine how much a bank is willing to give you
-as for purchasing an apartment? you cannot do that... but you can definitely buy a codominium or a duplex....the only way to purchase an apartment would have to be if you purchase the entire complex of apartments...but there is usually a high percentage of down payment when purchasing a complex...since it is considered a commercial property, not a residential property...
well, the best thing to do is to go and as a loan officer, or a real estate agent....make sure you are dealing with someone who is well known and works for a big company...
if you have anymore questions, feel free to ask... Banks are different for the different areas . In an economically depressed area you get lots of support. Where completion is high and profits good you can be lucky to find a real manager at the bank. Keep on trucking...deal or no deal. Keep your eyes and ears open. Don't let anyone say this or that is the right or wrong time. Get yourself prepared to apply for a loan, and do it when you are ready, not when someone else or the media suggest it's the right time.
There is no law against trying. It's between you and the bank. No matter what your future prospects are, the bank doesn't care about college degrees. If you are taking out loans for tuition, the loans may help with your credit score six months after you graduate, as long as you don't miss any payments.
The bank wants to know where the money and future money is coming from: income.
If you have money set aside primarily for tuition and no job, your priorities are either not lined up or you're taking on something extra bold (nothing wrong with that).
Past two years of income, tax returns, where you lived. If you have not been paying rent, it is a similar situation to not having credit built up. Even if the banker is your buddy, your buddy needs something on paper that you took money in and paid money out for something important on a periodic timely basis. These are tryouts for making monthly mortgage payments.
Do you want a house now? Drop out of college and work full-time. If you're "looking for ways to help pay" tuition...one thing at a time, perhaps?
Income from rent to pay a mortgage and tuition would be nice. It's killing two birds because many people do the school first, then get the home next, etc. There's absolutely nothing wrong with thinking big, therefore, call your parents.
Option 2: Parents co-sign on a home loan.
Again, no matter what a college degree is supposed to do for you, it means squat when you're applying for a loan. If a bank asks for your transcript, it is to show what your occupation was. If you have the down payment and were a student, the bank still wants paper documentation to prove what you were doing the past two years, whether you were full-time employed or a student. The bank wants to see their money grow in the same way you'd like to see your investments grow and tuition paid off. Prove to the bank that you can improve their money, not put it at risk.
Also, if you're renting now while in college, bump into your landlord frequently. See what he/she is up to, how they do it, when, and why since they're doing landlord stuff. They don't teach landlording in college, do they? How many other houses does he/she own? How did landlord acquire property (spouse, inheritance, cash)? If you don't own now, you will own later, educate in the meantime. The "sooner the better" applies here to RE/landlording knowledge as it does to owning property.
Subscribe to a local real estate office's email notices. You'll get a daily or weekly email containing listings. It's a convenient way to scope out the neighborhood and get a feel for the market. Stay on top of the market prices and watch the trends even as a non-owner. With the market the way it is... part 2 is the biggest problem. The banks are tightening up their loan standards since the subprime market has burst. Too many people with bad or little credit built up and not enough downpayment are late making payments or gone into foreclosure.
Legally, banks cannot descriminate against an adult. So long as you have down payment and strong verifiable income, banks cannot discriminate against an 18 year old or 80 year old. But, if you are 18 and just started working 3 months ago and they could tell you to comeback later after your work history is built up. Your problem is not age, but your income. You can take out a loan for anything, but you have to prove the income to pay it each month. Rent does NOT count as income, because you can not assure that you will have it rented each and every month. |
