Financing for a tipped income person

6 Replies

Hello everyone- I need your advice!

I am 26 working full time as a bartender and a part time real estate agent. I am looking to purchase an investment property, preferably a multi family unit between 2-4 units in St. Louis, MO. Unfortunately banks and lenders do not like seeing tipped incomes. I have been disqualified for a mortgage simply because I have not been at my job long enough. I make plenty of consistent tips (that are claimed on paychecks) but they still will not put it through underwriting. Is there any way around this? Any advice would be great!

I have a mid 700 credit score, meet debt to income limits, and have downpayment funds pending the price of the property.

Search for stated income lenders. There are some available.

Thanks! Is there a good way to start searching or just ask around and network into one?

If you have been on that job for 2 years and can show 2 years of income tax returns, they should accept it. They will probable average the income over the two years.

If you haven't been in an industry for 2 years they won't let you claim income from any job/industry (I believe the exception is if you just graduated from college and are in the industry your degree is in)

Good suggestions above. I would look for a different lender and /or check with local banks. If you are claiming your tips and have 2 years of returns there shouldn't be an issue. Often times lenders who don't have experience with a specific scenario, like you described, do not know how to look at the deal so they just say they cant do it. 

Yes as stated above you will have to show proof that you have been getting tips for the past two at least.  A VOE ( verification of employment ) will prove this from you HR department and from there you should be golden.   Have you been working there for 2 years at least?

Thanks for all the help! Unfortunately I have only been at this job since October 2012. I'll check with some local banks, and if nothing else just wait out the 6 months.


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