Qualifying for a conventional mortgage with unconventional income

7 Replies

Hi BP community,

Im a first time home buyer and I need some advise on where to start with seeking a conventional loan. My girlfriend and I are planning to buy a MF in either cape coral or port charlotte. We'd like to house hack for a year with an FHA loan before deciding if we like the area enough to buy our own home close by. So here's the problem; I'm a merchant mariner and my girlfriend is a travel nurse. Because we both work short term contracts, we cant show employment by one company for the last two years like all conventional lenders require. We have w2s and pay stubs to show that we earn cumulatively 150k annually for the past 4 years. We also can meet all other requirements for borrowers (credit score, DTI, etc). Will we have any problems qualifying? Would it be best to go to a small bank or credit union? Any advise is much appreciated.

As long as your careers are in the same industry/field for at least the last 2 years you should be fine.

So long as its the same line of work and you don't have declining income from your most recent year versus the previous year by more than 20%, the lender will do a 24 month average of your income and count it in that way. 

Hi Christopher,

I usually advise clients to seek a smaller lender; with the large banks you're often just a number.  I have a great local lender in Fort Myers that holds many loans in their own portfolio. They're more understanding of situations like yours, more nimble, and responsive, i.e.: you can get them on the phone anytime.  PM me if you'd like their info.  I've referred a number of clients to them over the years with positive feedback and results.

Peter

Originally posted by @Christopher L Shannon :

Hi BP community,

Im a first time home buyer and I need some advise on where to start with seeking a conventional loan. My girlfriend and I are planning to buy a MF in either cape coral or port charlotte. We'd like to house hack for a year with an FHA loan before deciding if we like the area enough to buy our own home close by. So here's the problem; I'm a merchant mariner and my girlfriend is a travel nurse. Because we both work short term contracts, we cant show employment by one company for the last two years like all conventional lenders require. We have w2s and pay stubs to show that we earn cumulatively 150k annually for the past 4 years. We also can meet all other requirements for borrowers (credit score, DTI, etc). Will we have any problems qualifying? Would it be best to go to a small bank or credit union? Any advise is much appreciated.

 It'll more or less be treated as self employment with the lesser of the average of the most recent two tax years over 24 months or YTD earnings over N completed months in the year, with one-off exceptions to the latter for industries known to be seasonal.... those reality TV Alaska fishermen making $100k in 2 months of work can get mortgages, and real estate agents can get mortgages in February even though their YTD is often $0. :)

Start getting a detailed list of employer start/end dates together along with all W2s/1099s.

Originally posted by @Peter Davis :

Hi Christopher,

I usually advise clients to seek a smaller lender; with the large banks you're often just a number.  I have a great local lender in Fort Myers that holds many loans in their own portfolio. They're more understanding of situations like yours, more nimble, and responsive, i.e.: you can get them on the phone anytime.  PM me if you'd like their info.  I've referred a number of clients to them over the years with positive feedback and results.

Peter

 Thanks I'll definitely PM you.

You dont need to have 2 years employment with the same employer, you need 2 years in the same line of work with no gap greater than 6 months. I had a private nurse buyer earlier this year, she had 9 employers in 2 years, it was not pretty getting all those VOEs (verification of employment) but we do what we have to do to close the deal.

I am federally charted and I close in all 50 states, please message me if you need more info

Cheers