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I am in an awkward way. I have enough to put a down payment of 25-30% on a house. I have 70k in assets not counting things like my vehicle (stocks + bank accounts). I have a decent job (1 in 4 years, 2 in 5 with proof of not being fired), proof of internet bill pay, proof of rent payments, and other things needed for a pretty good alternative FICO. I also have a parent with a perfect FICO (near perfect of course), and a 90k+ income with a ton of assets and no debt. That person is willing to co-sign.

With mortgage rates shooting up in the next year, I would like to buy a condo. However, I only got my first credit cards in January. I lived with my parents in college and worked a part time (28 hour a week) job to for pay gas and insurance while having a full ride scholarship. I am looking to purchase by August. I have proof that I have been a perfect payer of any debt with no missed payments but am afraid that means nothing today. It is almost like being frugal and paying bills on time while maintaining a good budget is a bad thing. Is it still possible to qualify for an FHA loan? Is there a reason having proof of not needing credit counts against me? If I can get a loan, what will my rates look like?

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  • Have you tried actually applying?
    – Hari
    Mar 23, 2017 at 22:41
  • Doesn't sound awkward at all. You have no debt, pay your bills, have a solid down payment, and a good job history with income to support a mortgage payment (as long as you buy something within reason).
    – BobbyScon
    Mar 23, 2017 at 22:58
  • @Hari Ganti I talked with my bank who probably has records of all of my transactions and it seemed to be 50-50.The only thing they thought would sway it was the co-signer.
    – Andrew Scott Evans
    Mar 23, 2017 at 23:31
  • @BobbyScon So if I had to take 160-175k, would that be a problem? Housing prices were I live are insane and getting worse. Most builders went bankrupt here in 2008 and cannot keep up with the population growth. It would be sad to leave Denver after living here pretty much my whole life.
    – Andrew Scott Evans
    Mar 23, 2017 at 23:33
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    Its very unlikely that rates will "shoot up" by next year. Higher maybe, not dramatically so. You are looking for a bank that does manual underwriting.
    – Pete B.
    Mar 24, 2017 at 11:52

2 Answers 2

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Some comments

  • If you have no bad credit history you can probably find a bank that will evaluate your worthiness based on income and other factors. You might have better luck with local banks or credit unions versus large brand name banks.
  • FHA loans are geared towards those with bad credit and/or little to no down payment. If you can afford a down payment then you should be able to get a conventional loan (which should be cheaper)
  • If your parents asked the question I would advise against them cosigning on the loan. It should not be necessary based on what you've provided and it does not provide them any benefit. Best case scenario you pay the loan anyways; worst case you miss payments and/or default and it hurts their credit, not to mention your relationship.
  • Don't jump into a bad deal just because you are afraid interest rates will rise. Find a good deal on a condo or house you love, and if rates do rise past what you can afford just save up more money, even if that means renting for a little longer.
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  • @D Stanley Thanks. Unfortunately, my area is becoming the San Francisco of the Great Plains. Housing is more expensive here than in Chicago now. Most people my age will never afford a home if the rent and housing price trends continue.
    – Andrew Scott Evans
    Mar 23, 2017 at 23:36
  • @AndrewScottEvans well don't buy out of fear, and shop around if your bank insists on a cosigner. It's a huge benefit to them so they may not be completely objective.
    – D Stanley
    Mar 24, 2017 at 2:23
  • Additional comment on interest rates: yes, they are going up, but they are going up from an historical low. Even 4.5% or 5% is a great rate, historically speaking.
    – grfrazee
    Mar 24, 2017 at 17:21
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At the end of the day all that matters to the bank is income and any existing debt.

If somebody else with no debt and a lot of income is signing the loan, then your personal situation is irrelevant. You could be a junkie in a halfway house and the bank would not care.

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