newbie questions about HML and Conventional loans

[Christopher Oliva]

Happy Thurday everyone! I've got a few questions about HML and conventional mortgages that i was hoping you guys could help me out with.

-How is someone able to qualify for a traditional mortgage if they quit their job and go into real estate full time?  Isn't 2 years of consecutive work history one of the requirements to qualify for a mortgage?

-If i can't qualify for a traditional mortgage or can't come up with the money for the down payment on a traditional mortgage(assuming 15%-20% down is required), would using a HML to purchase a rental property and then refinancing after a year be a good idea?

[Bob Okenwa]

1. If you have no W2 income or 1099 (self-employed) income for the last 2 years, you're not going to a conventional mortgage. 1099 income is even harder to qualify for a mortgage than W2 income even if you have been doing it for 2 or more years.

2. If you refinance, you're still going to need to show income and tax returns for 2 years and paystubs, etc. 

You may want to consider at least doing real estate for 2 years to show that you have earned self-employment income at a reasonable clip before quitting your W2 job.