Business & Finance

I am a full time university student without a job (juggling school and kids) with no child support. I have won a dream home which I plan to sell. I will than pay off student loans and buy a smaller house and a better vehicle and continue my university from the rest of the money.

I take possession of the house in a month and student loans doesn't pay me much. So until I get the house sold, would I have a problem mortgaging it? I don't want it all mortgaged (it is a very expensive luxury house), but I would like to mortgage about a 1/4 of its value or even less, until I can sell it.

I would make my mortgage payments from the lump sum I get from them. I have a good credit rating, but no income.

You need an income in order to borrow, even if you have equity.

Sort of puts a damper on winning a luxury item.

I can only imagine what the taxes are on that baby!

Congrats on winning though!

G'day, Kitty
Let me see if I understand this. I will put it as an example. (I declare that I am not a bank manager, hence, cannot guarantee anything.)
You have won as a prize a house worth A$600,000. If you went to the bank/financial institution to borrow $100,000 and use your house as a security. I believe you will be granted that loan, but it may be at a higher interest rate, maybe 1 to 2% more than standard.
Let's say the interest rate is 6% pa. The interest for 12 months is $6,000. All you need to do is make sure you have the $6,000 in the bank to pay the interest, you can spend the $94,000 on a smart investment.
Thus, if the above is your situation, you could possibly get a loan.Even without an income. It would help if you can show the bank that you have a good chance of getting a job, when you complete your studies.

Hope this helps

You will not get a loan without verifiable income.

Absolutely not. That was the main contributing factor to the bank meltdown. Financial institutions giving loans to anyone who applied because of the increasing value of the housing market. They forgot that "what goes up, must come down". If you won a house why do you need a mortgage? Stay in an apartment assuming you have one now and then look for a smaller house once the one you have won is sold. As the other answerer pointed out with no verifiable income you won't qualify, period. Use zillow.com or other real estate websites to ascertain the current value of the house you won and what price other comparable houses in that area are selling for now. Then cut the asking price by 15% or so and it should sell. Take the profit from the luxury house and buy a smaller affordable house with the cash. Ensure you factor in the cost of insurance, taxes, etc. so that you don't overextend yourself. My advice would be sell the luxury house, stick the money in bonds or something else that is safe and wait until you are out of school and working to buy a house. With an income you can buy a smaller house qualifying easily for a small mortgage with your good credit. Best of luck.