Could you just pray that we get a good loan for this house?
This is getting so frustrating.
They won’t recognize Josh’s scholarship as income because it’s not guaranteed year to year. And that’s over half our income.
And if they called right now to verify that Josh was, indeed, employed at the University, they would receive a resounding “No” because his Teaching Assistantship was technically over in May and he will find out in
August whether he gets it again next year.
So according to the banks, we are making $0/year and trying to buy a house.
Our options:
- Josh emailed the guy in charge of Teaching Assistantships to get a letter affirming he will, indeed, have a job next fall. This is our best option and requires a lot of prayer. Because it’s not likely to happen. The lady at the bank got back to us and told us that even with proof of a job, the only way we could get the good, un-co-signed loans is if we put 20% down. And we don’t have that. All because they only recognize half his income.
- We can get our parents to cosign the loan with us, which would raise our interest rate on the loan and thus our monthly payments. It also is a big thing for either set of parents to take on. (If you’re reading this… no pressure, Mom!)
- We could forego the earnest money we put down when we made our offer ($500) and just continue to rent. (My absolute least favorite option.)
::Sigh::
*Updated to complain further*
This is so unfair. We asked BEFORE WE PUT IN AN OFFER how much they’d be able to get us, and they said $85k and our payments would be $600/mo. Now they say they can’t get us a loan for $70k without a co-signer and even then the payments would be $650-675/mo. (These figures include PMI, taxes, and insurance.)
They told us if we could get a letter saying that he is guaranteed his scholarship for the next three years, they could count that as income. I want to know, do they ask Everyday Joes to get letters from their bosses confirming that they won’t get fired or laid off in the next three years?
Discrimination against Grad Students. Plain and simple.
Praying, praying, praying. Wishing you blessings today!
I hope that you are able to get something worked out. Buying a house is super frustrating.
I’ll pray. buying/selling a house is seriously the most stressful thing I’ve ever done in my life.
Your offer to buy should have been conditional based on your ability to secure funding. So if you can’t get financing, you’re entitled to the full amount of your earnest money (less appraisal or inspection, if they’ve already occurred). Talk to your realtor or title/escrow company.
Good luck!
Praying, praying.
Yes, they do actually request such proof for “average Joes”. We had to bend over backwards to get our loan. It’s not a grad student prejudice – it’s a less-than-rich income prejudice. Its really, really hard to get a home loan without a huge down payment – no matter what your credit is like.
I’m so sorry for your disappointment. 🙁 It’s a really tough market right now – you see all these “for sale” signs, and hear about all these people losing their houses due to foreclosure. Perhaps a few years ago banks would have been more willing to take risks, but now they’re being more discriminatory. It sucks for those of us who don’t have the huge down payment. I know this probably doesn’t make you feel better, but I don’t think it’s personal. :-/ I will be praying that you will feel at peace with whatever happens.
Yes, despite lending laws, they ARE discrimminatory. My lender didn’t want to count my income because I was pregnant at the time we applied and they feared I would quit and stay home after I had my 2nd child.
Have you considered an 80/20 loan? With this type of loan you could avoid paying PMI, which would significantly lower your monthly pmt.
Also, you could consider going to a mortgage broker. They have more experience shopping around lenders for the best type of loan and rates for your circumstances. They usually don’t charge fees to the buyers – they get a kickback from the lender for the referral.
Just a few thoughts. I’ll be praying for you.
wow…sorry to hear about all ths. we still have not bought a house…so this is a scary realization. here’s wishing you the best.
amanda
everyone has to prove their income to get approved for a loan. we got a 0% down, conventional 30 year fixed mortgage for our home, but we also have PMI. the mortgage company DID call both my employer AND my husband’s employer to confirm our income and their intentions to keep us on staff. that is completely normal. and whenever mortgage calculators tell you how much the mortgage is going to be, they usually don’t estimate the cost of taxes, insurance, and PMI.
this is not discrimination…this is about lenders protecting themselves against high risk prospective home buyers…i know it might be hard to admit, but you and your husband are a high risk (with no ‘steady’ income..)….
hopefully your husband’s university will cooperate and be understanding about the situation at hand…
We’ve had to jump through hoops over here for a house too. I think it’s worse now with so many people defaulting on mortgages and the banks tightening their loaning practices.
We did do an 80/20 mortgage on our last house which dropped our payment by about 90 bucks a month, but the interest rate on the 20% was a couple percentages higher. The only reason we did it was because we were still ‘dinks’ (dual income no kids!) and could pay off the 20% loan in a couple years.
If you put a contingency in your offer based on approving the inspections you can always get out of it saying you don’t approve of the condition of the house. Usually realtor’s put something in an offer as a ‘get out’ type of thing. You may have to pay for an inspection, but it’d probably be cheaper than losing the whole 500.
Good Luck!
I’m sorry this is happening! 🙁 I have never tried to buy a house, so I can’t give any advice, but I will be praying for you!
Is it possible for you to buy ‘to rent’? Say to the bank you are buying as an investment and will be renting the property out – thereby covering all costs.
You could then be your own tenant?
As I type, I realise this idea HAS to be too good to be true.
Yah, Sass E-mum, because THAT’S legal.
Go loan shopping. Just be careful and make sure the lending institution is credible.
🙁
It’s the market.. even those of us who are grossly overqualified had to shop around to get a home loan.
I think it’s getting harder and harder to get a home loan, no matter what your situation.
I’ve never had to go thru any of this. My hubby owned our home when we married, so when we refinanced, we just added my name to everything.
Saying a pray for you…
I’m so sorry *hugs* I will definitely pray for you!
Depending on the price of the house, another suggestion, if either of your parents would be up for it, to get a loan through your parents for “any reason” as our bank calls it. If you can get enough that way to make it up to 20%, then you’d be safe. The only bad part is you are paying two loans, and presumably the “any reason” loan is going to be a shorter term so a higher payment. I’m not sure how much the house cost, but if it is a modest price, then 20% could only be $10-15k.
We’re in the process of buying a house right now. Just be aware that the 80/20 loan doesn’t exist anymore – a side effect of the “housing crisis.”
So congratulations! You’re being hosed for other people’s failure to take care of their business!
Have you guys talked to your local Social Services to see if there are any resources available to low-income people? I have seen flyers at our office for loans available through the Rural Housing (for low income families) and they even provide part of the down-payment. I think.
I just stumbled upon your blog through a blog feeder, and read this post (I see above you were able to finance the house, which is awesome news!) and can definitely relate. I’m completing my graduate studies this month, but last year, a bank tried to convince me I would qualify for a line of credit and then be able to consolidate all my credit card debt onto a much lower interest rate. I told them over and over “I’m a grad student, I don’t think so.” They told me over and over, “No no you can get it.” So, I took time off from coursework (I’m a single mom too so my time was/is very precious to me), went in to see the personal banking officer, watched as she hemmed and hawed, gave her proof of my $40k+ in scholarships, and various income sources, mentioned several times I was a grad student, and finally an hour later she goes out to get her manager to try and figure out why the application for the line of credit won’t go through. Comes back with the manager, and the manager says, “You’re a student. You don’t qualify.” No shit. Really? That was one of the few times in my life I ever truly flipped out and bitched somebody out.