5 Comments December 20th, 2009

Is there a home loan for a person with $60k in student loans and no down payment?

seriously77@sbcglobal.net asked:


I am a single parent who just finished college. I have $60k in student loans and no savings to speak of. I have an amazing offer to purchase a home for what the current owner owes on it, but I don’t know where to even start looking for a bank/agency who will give me a loan with my background. Any advice?
I have 2 jobs at the moment. 1 full time job that I have been at for 3 1/2 years and 1 part time job I have been at for 2 years.

The seller is a friend who owes less on the home than what it is worth and she is trying to help me out.

I only have 1 credit card and it is in good standing. I do not have any other credit lines. I had a bankruptcy in 2001.

I know the outlook for me here is bleak, but I am hoping for just a chance!

Thanks!
That previous question Fort Still Army Wife brought up was/is not my house. It was the house I was living in, but my brother owns it. I was splitting the mortgage with him, but he was sending the money in late or not at all. I didn’t feel all this explanation was necessary when I asked that question at that time. I am a first time home buyer and I can afford a house payment. I just don’t have a savings account.

This entry was posted on Sunday, December 20th, 2009 at 12:50 am and is filed under Home Loans. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

5 Responses to “Is there a home loan for a person with $60k in student loans and no down payment?”

  1. v b Says:
    December 22nd, 2009 at 2:40 pm

    Even FHA loans want 3.5% down.

    The days of liar loans and nothing down are over.

  2. Steve D Says:
    December 24th, 2009 at 6:17 am

    As has been noted, the minimum down will be 3.5% with an FHA loan. You will also need 3 to 5% more for the closing costs unless you can get the seller to pay, and another 2 months of expenses in the bank before closing. About $1,000 of the closing costs will be out of pocket (appraisal, inspection, and insurance), so even if you get the closing costs paid for, it won’t come until closing and you will still have cash expenses.

    There is also the problem of employment – you haven’t mentioned your job and how long you have been there – lenders want to see at least 1 and more of them want 2 years of steady full-time employment at your current employer to qualify.

  3. klatu80 Says:
    December 24th, 2009 at 11:01 am

    I graduated college in 2004 with $60k in student loans and was able to purchase a condo for $110k with 100% financing (zero down). However, due to the recent housing crisis, 100% financing loans are no longer available. The lowest down payment you can get away with now is 3.5%. But keep in mind that if you are a first time home buyer, you’ll get an $8,000 credit on your taxes. Maybe you can borrow the down payment from a family member and pay them back with your tax refund next year?

    Lenders don’t generally look at student loans as a bad thing. As long as you are making enough money, paying all your payments on time, don’t have any delinquencies, and don’t have much credit card debt, you should be able to get a mortgage.

    One thing you should question is why the current owner is giving you the opportunity to buy their house for what they currently owe. Do they owe more than it is worth? Or are they a close friend trying to do a good deed and help you out? Keep in mind that the lender will require an appraisal on the house, and the value of the loan cannot exceed the appraisal value. If there are a lot of foreclosures in the area, it will really drag down the appraisal value.

    Hope this helps, good luck!

  4. Fort Sill Army Wife Says:
    December 25th, 2009 at 8:36 am

    How are you getting a house, when you already have one you cant pay for?
    your previous question

    Who can explaing to me why the mortgage company won’t credit my payments to my account?
    Due to the economy, we have been a bit slow in paying our mortgage. We were paying the full amount every month, but usually a bit late. Because our payment did not include the late payment fee, they are holding our money and not crediting it to our account. They are saying we are 3 months behind even though they have all of our money, minus the late fees and 1 month’s payment (we are truly only 1 month behind). They are talking foreclosure now and will not accept any money from us unless it is for the total amount due. Why will they not credit our account with all of the money we have sent them?

    Any advice on what to do to keep our house and to get the mortgage company to credit our account for the thousands of dollars they are holding onto?

  5. Robin C Says:
    December 28th, 2009 at 5:24 am

    I take it your brother is delinquent, and facing foreclosure?

    If yes, call his bank. Tell them the story and see if they’ll give you a loan. It would be much easier for them than foreclosing on your brother. Doing this might not get you the best rate.

    Otherwise, find a good mortgage broker in your area. They can look at all of your options with different banks and find the best deal for you.