Mortgage for new grad RN?

Question · Sep 2, 2005

I graduated in May and am working full time. I am clueless about how to go about getting approved for a mortgage -- I have been given such great advice regarding my nursing career and other aspects of my life from members on allnurses.
I have been paying rent for a while and would love to be able to make a good investment. I am looking to get approved for a mortgage of about $75,000. I make a new grad salary around $20/hr.
Is it possible for a single such as myself to get approved for a mortgage after just graduating college? What factors are considered? Am I being foolish for trying to buy property without being married and having a new grads salary? I would really appreciate any insight regarding this topic if you or your family have experienced this?
Thanks so much!!

I AM NOT IN THE REAL ESTATE OR MORTGAGE BUSINESS AND THIS IS ONLY MY OPINION!

It is probably possible to get a mortage with that wage but the main factor will be your credit score. If you have a high credit score than it probably will not be a problem for you. A good credit score can also get you a better interest rate, which we all want. It really is not that hard of a process, so don't stress to much. Grab a phone book and look up banks and mortgage companies, call them and they will get you started.

Check around and get the best interest rates and see if they require pmi insurance. Most places do require you to pay pmi insurance if you do not put down 20%. Some places have cheaper pmi than others! ps. If you do not put down 20% and you have to pay pmi make sure that once you have paid 20% on your property including what you put down to call your company becasue if you want you can stop paying the pmi. Most places will not tell that information and you will keep paying. I would also ask if they have any early payoff penalities. That means if you pay it off within a certain amount of time they charge you extra. Personally, I would not go with one that has that policy becuase you never know what will happen!

If you buy land or a home without a realtor, I would suggest have a lawyer to help you and to be at the closing. You can also find them in phone book or ask some people who they recommend. When you find one just call them up and tell what you are doing and they will guide you from there. Hope this helps!

sugabuga · Sep 2, 2005

I would go talk to a loan advisor at a bank. My dh and I bought our house about a year ago and we're both in school now. The loan advisor can pull your credit report and if there are any discrepancies he can tell you how to fix them. Our credit was nowhere near perfect and we weren't making much money. They are usually very good about helping you out.

Sapphy, BSN, RN · Sep 2, 2005

I agree with the two above posters but I will also tell you that we were told we had to be in our current jobs at least 6 months to get a motgage :) Hang in there.,..it'll come

gauge14iv, MSN, APRN, NP · Sep 2, 2005

DON'T just look at the interest rate!!!!!!!

One physician I know was quoted 4.5% - when he got to the closing table to sIgn the papers, the mortgage company had changed the paperwork to 11%!

as I said on another thread - there are a lot of dishonest people in the business, the importnant thing is to develop a good working relationship with someone you trust BEFORE you need them. Interview your mortgage banker just as you would a new doctor for your family. The person you you choose should be someone who listens to your goals and plans, and develops a plan for your mortgage accordingly.

BTW - for mortgage purposes, your education in nursing school counts as "years in the industry". If you have been out of school 6 mos and it took you 2 to complete your nursing program, then you have been in that line of work for 2.5 years. You must have had the same EMPLOYER for 6 mos though.

Question · Sep 2, 2005

DON'T just look at the interest rate!!!!!!!
One physician I know was quoted 4.5% - when he got to the closing table to sIgn the papers, the mortgage company had changed the paperwork to 11%!
as I said on another thread - there are a lot of dishonest people in the business, the importnant thing is to develop a good working relationship with someone you trust BEFORE you need them. Interview your mortgage banker just as you would a new doctor for your family. The person you you choose should be someone who listens to your goals and plans, and develops a plan for your mortgage accordingly.
BTW - for mortgage purposes, your education in nursing school counts as "years in the industry". If you have been out of school 6 mos and it took you 2 to complete your nursing program, then you have been in that line of work for 2.5 years. You must have had the same EMPLOYER for 6 mos though.

True about interest rates! You want to know if it is going to be fixed or variable and if fixed how long will it be fixed for 5,10,20,30 yrs. Example, some loans are fixed for only 5 years with a lower rate but after 5 years it becomes variable and it can go up beyond the average rate or you could get a fixed 30 year loan and if it goes down to a rate you want you can refinance or just keep your 30 year fixed.

The change in rates from 4.5% to 11% at closing is why I always had an attorney with me.

Kiwi, BSN, RN · Sep 2, 2005

This is great information. I didn't know where to start with this. So I have to have been working for 6mo?

Question · Sep 3, 2005

This is great information. I didn't know where to start with this. So I have to have been working for 6mo?

Not always, it just depends! We got one with only 1 week of work!

Race Mom, ASN, RN · Sep 3, 2005

I AM a loan officer and I would recommend you start the process now. A good loan officer will help direct you in the proper program.

1st off, at least in Nevada, having just graduated, I would be able to use your new income. Proof of graduation and employment is what would be needed.

2nd, as far as what you can qualify for, that depends on your current debt (which will NOT include your rent but the new mortgage payment, taxes, insurance and any homeowners association dues, if any. Some programs only allow your debt to income ratio to be 38% and some allow up to 55.49%. The debt does not include things such as cable, daycare, food, etc. but what shows on your credit report such as credit cards, auto loans, dept. store cards, student loans, collection accounts.

3rd. As far as PMI (private mortgage insurance), this is only included if you get one loan that is more than 80% of the value of your home. So if you bought a home valued at $100,000 and put down 5%, you would have a 95% loan to value, therefore taking on PMI. The alternatives to this would be to do a 1st and 2nd mortgage from the start. Your 1st mort. would be for $80,000 and the second would be for the remaining $15,000. Of course the 2nd mortgage holds a higher interest rate, but you could end up with a lower payment this way (by not paying PMI).

4th. If your credit isn't so hot, you may be going with what is called a subprime or B paper loan. Usually they will be at a reasonable fixed rate for the 1st 2 years, carrying a prepayment penalty (you can pay to have 1year or no prepayment penalty) for the fixed period. After that it can adjust for the following 28 years. But, the goal here is to clean up your credit in 2 years and refinance into a prime loan with a better rate.

Most people will refi several times while they own their home. Don't be afraid to take a 5 year fixed rate, that can adjust for the following 25 years. Chances are you will refi before the 5 years is up, so why pay for the most expensive loan (interest rate wise) which is a 30 year fixed? All of the loans I described here are for 30 years, it's just the fixed rate period that changes. It still is stretched out over a 30 year time frame. You can do a 15, 20 or 25 year term also, but I usually never recommend this. It is a much higher payment and one month you may have $ difficulties and not be able to pay the higher payment. With a 30 year loan, you can always pay more when you can, and that alone will shorten the time of your loan.

Also, interest only loans are not necessarily a good idea. If you must do it to qualify (because it gives you a lower payment) than consider, but it sure is depressing to make a payment every month and your principal balance never goes down. If property values go down in your area, you could end up "upside down" just like a car loan.

I know this was a lot to hear, but I am just skimming the surface for you. And please be weary of the online mortgage quotes. As mentioned before, you dont want to go to closing with a rate you weren't quoted. Get everything in writting, especially the rate lock. If your LO won't give it to you, they haven't locked your rate and your rate is still vunerable to rise.

A good credit score is 620+. If you are lower than that, you will go with a subprime loan. Dont fret. Its still a loan, and not bad at all. You can get 100% financing with a 580 score for sure. Just remember, the more you borrow, (% wise), the higher the interest rate. And don't forget, you will have closing costs. They should be between 2-4% of the loan amount.

Good luck and feel free to pm me if you have any questions during your loan process. Im not aware of any good LO's in your state, but the best way to find a good one is to ask co-workers, family, neighbors,and friends.

Lisa

heartICU · Sep 6, 2005

I graduated in May and am working full time. I am clueless about how to go about getting approved for a mortgage -- I have been given such great advice regarding my nursing career and other aspects of my life from members on allnurses.
I have been paying rent for a while and would love to be able to make a good investment. I am looking to get approved for a mortgage of about $75,000. I make a new grad salary around $20/hr.
Is it possible for a single such as myself to get approved for a mortgage after just graduating college? What factors are considered? Am I being foolish for trying to buy property without being married and having a new grads salary? I would really appreciate any insight regarding this topic if you or your family have experienced this?
Thanks so much!!

I graduated nursing school in May 2003, and purchased my first house in December 2003, and purchased a condo a year later, so I can offer you some insight. It is definitely doable for a new grad! I am a single 25-year-old woman, and I got approved based on my credit history and new grad salary at 23 years old, so not being married or not having worked for a long period of time is not an issue, as long as your credit score is reasonable.

A couple pieces of advice:

1. Do not buy the first house you see. I fell in love with the second house I went through, and thought it was my dream home. I made an offer, and they accepted it, but the deal ended up falling through (house had too many problems). I was veyr upset for a few days, until....I went through another house, and fell in love with that one! Point being, look look look at many different houses in many different areas, until you get a feel for what you want in terms of features, etc.

2. Once you find a house you like, go through it at least three different times, on three different days. Take someone with you (friend, parents, etc); they may be able to see things you don't.

3. Find a realtor you trust. Make sure they know what YOU want!

Good luck - PM me if you want more info on my homebuying process.

PennyLane, RN · Sep 6, 2005

I bought my house as a single woman 3.5 years ago. I now pay less for my mortgage than I would in rent for a one bedroom apt. Oh, and a year later, I started nursing school. It's doable. Get pre-approved so you know how much house you can afford.

Kiwi, BSN, RN · Sep 6, 2005

I'm going today to look at condos and to speak with a realtor! My hospital offers a $5,000 forgivable down payment loan to it's employees. Thanks for this information. My apt lease is up on October 31, so I am taking all of your advice in this process.