If I Quit my Job Will Refinancing be an Issue?

Question

Brian Pulaski · Answer

Most likely. I didn't have a W2 job and had just shy of 2 years of flipping under my belt. The mortgage company made getting a loan a NIGHTMARE to the point we ended up getting rid of them and buying the house cash (new primary residence). I then went to refinance and again ran into hurdles. It didn't matter how much money I actually had, without that W2, getting a loan was very tough. This time around the refinance person actually just stopped corresponding with me. Not sure what's ever happened, he just never answered any emails or calls, go figure.

Ali Boone · Answer

You most likely won't qualify for a while, unless your rental income is that high and has been steady for a while. But one option is if you get a co-signer [and work with an investor-friendly lender), then you can do it. I did this after I quit my W2 job, specifically on two refis actually, and it worked great while I couldn't do it on my own.

Ram Srinivasan · Answer

@Brett Robinson

If you make your payments on time, there is no reason why the existing lender won't offer you renewal terms. Just have to hope that it is a competitive rate. Therefore worst case, if you can't qualify, you can just accept the terms provided by your existing lender.

Kevin Mouck · Answer

I would imagine that the rentals need to be set up as a small business, likely an LLC if you're that big, in which case the banks need to see 2 years of financials before they're any help. I am currently going through this. Even with a co-signer my income is "useless" until my taxes are filed this year. It's quite frustrating but if you can find a parner(s) who can get the financing for you it relieves some of the hassle. As for renewing the mortgages, I would think that as long as your credit remains high and the rentals are occupied you should be okay. That 2 year timeframe might be an issue though. I recommend sitting down with your investor minded mortgage broker and making a plan. Taking mine out for lunch next month...

Matthew Paul · Answer

I always wondered why having a job was considered better than being self employed .  When you have a " Job " you work at the pleasure of the employer . Tomorrow , 1 person has your fate in their hands .

YOU ARE FIRED can happen at any time for almost any reason .

As self employed , my fate is in my hands .

Brett Robinson · Answer

Shoot in my original post I should have clarified a bit. When I say will refinancing be a real issue I should have said renewing my mortgage when the terms are done (5 year terms). Maybe that makes the answer totally different?

Mike D'Arrigo · Answer

@Brett Robinson At a minimum, you're going to have to have 2 years of landlord experience and history on the properties. The lender will need to years of tax returns and will take the Schedule C income from the rental properties. As with any mortgage, they will factor in all of your debt and housing expense. Your debt to income ratio will then be calculated based on your rental income and debts and housing expenses. If your DTI falls within an acceptable range then you should be able to get financing.

If I Quit my Job Will Refinancing be an Issue?

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