How to get approved for a home loan with low income? I get this question all of
the time. Are you ready to buy a home but you're not sure you make enough money to
qualify? Well, that can be really tricky and sometimes it can be a big obstacle
if you don't know what to do. But I'm here to show you and I'm going to
tell you exactly how you get it done. Let's go!
So, the mortgage loan application process can be very daunting for people.
When you go to apply for a mortgage, the first thing that they have you do is
complete an application. This application is called by us in the business a 1003,
which is basically the name of the form for Fannie Mae. And usually it's a four
to six-page application that asks you pretty much everything about the home
that you're buying, the interest rate, your employment, your name, your social
security, how old you are, how many dependents you have, what your
assets are and it lists out all of the debts that are showing on your credit
report, okay? And this process can be very daunting for people because it is a long
application is not like a quick one-pager. And so many people get really
tripped up in the mortgage application process but it does not have to be
daunting. The mortgage application process is really just finding out what
your current situation is and looking at if you qualify and if you are able to
repay that mortgage. Most lenders really just want to know, "Are you able to repay
the loan?" Because they have millions of dollars set aside for mortgage loans but
they want to make sure that mortgage is repaid because they make a ton of money
off mortgage loans. So, I'm going to tell you how you get through the process. The
first thing that you want to do before you ever apply for any mortgage is know
what your debt ratio is and know what your credit score is. So, the way that you
do this is you should pull your own credit. I literally give you a link in
the description box for a link for the my FICO, okay? This is a website that will
allow you to pull and check your credit so that you can see all of the debts
that are up there and you can see your credit score.
Additionally it gives you different models so that you can see different
credit scores because the credit score that mortgage lenders use is different
than the one that other people use, okay? So, like if you're applying for auto loan
that score is different and those lenders are different than mortgage
lenders. So, you want to be really specific and get the credit report in
the credit score that mortgage lenders are looking at. And so go ahead and pull
your credit go to MyFICO, I do not recommend... you know some of the other
sites I know you can get my annual port for free or you can go to Credit
Karma. I've worked in mortgages for over 15 years and I'm telling you there is a
difference between the credit report that they use. They literally have their
own credit report called a mortgage credit report. And that credit report is
different, okay? It's actually called a RM a residential mortgage credit report. And
so you want to make sure that you are looking at that correct report with that
correct FICO score modeling. The next thing once you pull the credit and you
see the score, go ahead and look at your debts. All of the debts that are on your
credit report are the debts that they are going to use on your mortgage credit
application. So, go ahead and add up the credit cards or the auto loans or the
other student loans or whatever is currently showing on your credit report
and add up the monthly payments and divide that by your income so that you
have your debt ratio, okay? Some companies call it your debt to income ratio or
your DTI. You need to know this and you can get
all of this just by pulling your own credit report. But if you are applying
for credit and we're talking about getting a home loan with low income.
You're going to run into a little bit of an obstacle that you wouldn't necessarily
have if you have a higher income. But if you have now looked through your debts
and you see okay you have $1,000 a month in debts and maybe you only make $1,500
per month gross, okay? That's another thing. Lenders will use your gross income,
alright? So, just give you a quick example when you're figuring out your
debt to income ratio. Make sure you know what your income is per month, your gross
monthly income. So, if you make $10 per hour and you work 40 hours per week,
that's $400 per week. You work... you know four weeks out of the month or 4.3 weeks
out of the month. If you make $400 per week multiply that by 52 weeks and then
divide by 12. And that will give you your gross monthly income then you divide
that number by the debts that you had on your credit report and you will have
your debt to income ratio. Now, that is how you come up with it and that's the
same thing that lenders are going to use. So, if you find that you don't have
enough income let me tell you a secret on how to get approved a different way. A
better way that I learned after failing in real estate
and losing my properties and going through foreclosure and ending up in my
parents basement to now being a millionaire that owns lots of properties
and makes tons of money in real estate. I figured out a better way and I'm going to
share that with you. You can just skip the mortgage process altogether guys. Yes,
you will probably get a mortgage eventually. But you do not really need to
focus that much on home loans and getting approved for a home loan if you
want to start making money in real estate and you want to start acquiring
properties. A faster better way that I'm going to teach you is to start to find
people that already have a property that already have a mortgage and they are
behind on that mortgage payment. Those people are losing their home to
foreclosure and in many cases you can help them avoid foreclosure by marketing
to them, catching up those payments and then taking over that mortgage. It's a
system that we call TOPS or taking over mortgage payments or taking over payment
system. There's all different types of names but it basically means that you
are purchasing the home subject-to, okay? You can either do a subject to where you
purchase the home and they leave that mortgage in place. The money that you put
down will catch the mortgage payment up. And then you can take over those
mortgage payments. That way you never had to have your credit checked, you never
had to have your credit pulled, no one is looking at your credit ratio, you just
need to make sure that you can afford to take over those mortgage payments, okay?
And that you can show the seller that you're able to do that. Or you can even
lease the property, again they're behind on the mortgage payment. You make those
payments that they're behind, you make that the security deposit to catch the
mortgage up. And then the mortgage payments are now your lease payment and
you did a lease to buy that property. So, there's tons of ways where you can start
getting property and you never have to have your credit pulled, you never have
to show anyone your income and you never have to go through that daunting
mortgage process. And this is probably a better way if you have low income or
income that you have that's not reporting or maybe you got paid in cash
or you didn't file your taxes and you wrote a bunch of things off. So, on paper
it doesn't look like you made a lot of money but you want to start getting some
properties. This is a faster better way to do it just target people that are
already in foreclosure or bankruptcy. If you want full training on this I've
created an entire free training. Please just go to noellesfreetraining.com to
get the full training on how to find people with property problems, how to
target them, what to say, how to find those people for free and how to put
deals together where you are making tons of money and you are acquiring
properties that are making you money and growing your wealth. Please go ahead also
and like this video, subscribe to my channel and I'll see you next time.
This is Noelle, to your success!