Is it possible to buy real estate without an income? (large downpayment)
TQQQ has done very well for me in the past few years, so I have enough capital to put down roughly a 50% down payment on an apartment/condo in my city (Tier 2 city), but given I'm still in school, I will have no income.
Is there a process to get approved for a mortgage with no income (literally none, unless summer jobs count) but a chonker of a downpayment (50-60%)? It's fine if the interest rate is high since I have high conviction in real estate in my city.
Based on the most helpful WSO content, purchasing real estate without a traditional income can be challenging, but it's not impossible. Here's what you should consider:
Credit Score and History: Lenders typically look for a strong credit score and a history of timely payments. If you have a good credit history, even without a regular income, it might work in your favor.
Debt-to-Income Ratio (DTI): Normally, lenders look at DTI to assess your ability to manage monthly payments and repay debts. No income would usually result in a very high DTI, but a large down payment could potentially offset this concern by reducing the loan amount and thus the required monthly payments.
Asset-Based Lending: Some lenders offer asset-based loans where the loan is granted based on the value of the assets you hold, rather than your income. This could be a viable option for you.
Non-Qualified Mortgages: These are designed for borrowers who don't fit the typical lending criteria. They might accept alternative income verification, such as bank statements or, in your case, proof of summer jobs.
Higher Interest Rates: As you mentioned, be prepared for potentially higher interest rates due to the increased risk the lender is taking on by providing a mortgage without traditional income.
Co-Signer: If you can find someone with a stable income and good credit to co-sign the mortgage, this could greatly increase your chances of approval.
Summer Jobs: If you have a history of summer jobs, this might count as part-time income, and if it's consistent, some lenders might take it into consideration.
Remember, each lender has different criteria and risk tolerance, so you'll need to shop around to find one that's willing to work with your unique situation. It's also wise to consult with a mortgage broker who can guide you to the right lenders.
Sources: Has anyone here built wealth through FHA 3.5% downpayment 4-unit loan?, The Great Deleveraging | The Daily Peel | 7/18/2023, Some Very Basic RE Questions, Buying a ~$600k house at 25, https://www.wallstreetoasis.com/forum/real-estate/is-anyone-lending?customgpt=1
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