Investor and Architect · Ramsey, NJ · Member since 2010 · 305 posts · 84 votes
As I have heard, traditional lenders (banks, S&L's) want you have a W2 to refi a rental (ie long term 30 years, 75 LTV, 5% at this point in time).
What are your options if your employment situation changes? There would still be income just not fully employed by one company. More like consultancy where there would still be documented income. Would a traditional lender still be OK with this or would I have to find some other way?
Foreclosure Specialist · Miami Beach, FL · Member since 2012 · 131 posts · 123 votes
14y
Lenders prefer a W-2 but they can also accept, and usually require, 3 years of tax returns and/or profit and loss statements. Lenders want to make sure your income is stable and that you will be able to make the payments. If you have proof that your consultancy income will continue, then by all means talk to your bank.
There are also other factors that come into play when applying for a loan, such as your credit history. Your credit history tells the lender whether or not you’ve been able to meet your loan and credit obligations in the past. If you have a good credit history, securing a mortgage can be easy. Poor credit history can make it more difficult.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
14y
Yes, I've switched jobs before and as long as I was still in the "same industry" it was fine (W2 to 1099). Of course, other factors required and provided included the 2 years of tax returns with Sch E rental income, good credit, cash reserves. For me, it was treated as being in the same industry and was fine.