Investor / Lender · Seattle, WA · Member since 2014 · 1k+ posts · 730 votes
My friend and real estate agent is trying to buy a personal residence, but because he's a realtor, he doesn't have a regular W-2 Income. What kind of options does he have? Are there any types of banks (or loan programs) that will use his 1099 income and finance his home at a good rate?
I know portfolio lenders loan a little bit differently than conventional banks. Are there any in the greater Seattle area that can do this?
Real Estate Broker · Indianapolis, IN · Member since 2014 · 3k+ posts · 2k+ votes
11y
He may be up a creek without a paddle. Unless he can do a large amount down. Even then most banks will be hesitant. He should look for owner finance or a private lender.
Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
11y
before racing off to do some wild creative financing, has he tried to get pre-approved with a real lender? we get realtors loans all day long, as well as lawyers, dentist, etc. the answer to your question is very simply, it depends.
and for the record the diff between portfolio lenders is primarily in the type of properties financed, not necessarily the ease at which someone will get approved.
don't bother with a bank or credit union. go to a mortgage broker or banker. only they will take the time to work with him. it's not worth the banks time or energy
FYI: if you've been going to school for the past 2 years and recently started a position and have made it through the probation period, your income fully qualifies for loan purposes. attending school or some sort of training institute is considered "employment" so long as your job is in the relevant field and you've past the probation period.
Thanks for the tip, guys. He's more than a couple of years removed from school, so not sure that route will work.
But I had him talking to my mortgage broker when I created this thread. I was hoping that portfolio lenders might look at him differently, but I guess not. He's still talking to the mortgage broker, so hopefully that will turn into something positive soon!
And if the mortgage broker isn't able to get him a loan, I'll turn to you, Patrick :-)
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
11y
You are in Wash State
Lease w option is renting then getting a mortgage.
CFD, Contract for Deed, AFD, Agreement for Deed, LC, Land Contract, ILC, Installment Land Contract, all basically the same,
Some down payment, monthly payment, term 1 - 5 years, balloon paid off in full or extended. No repairs for seller. Need to foreclose to repossess if buyer defaults.
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
11y
Thanks @Brian Gibbons. You are too kind! In WA, the concepts of seller-financing are basically the same but the terminology a bit different. One big difference is the buyer actually takes title from day one with either of our 2 instruments of a seller-financed purchase. A Real Estate Contract gives more safety to the seller. They can 'foreclose' (forfeit) after 90 days of default through a simple paper called a contract forfeiture. It's a 9-pg contract that kind of reads like a big PSA. A Note and Deed of Trust (basically a mortgage) gives more safety to the buyer. A seller has to go through judicial foreclosure proceedings to get the property back. In either case, the property is in the buyer's name, making re-financing much easier and protecting the buyer's vested interest. A l/o is a l/o here like anywhere. Hope this helps!
Also, your friend could get someone to co-sign the loan (parents, family, etc...). That will help him qualify. He would make the payments and then after 1 or 2 years, he can refinance and remove the co-signer from the loan if they wanted.