Financing in Berkeley>Question Details

 James, Real Estate Pro in ,

I'm looking to get a loan for my second/vacation home, but I am not a full-time employed, although, I have regular multiple income sources.

Asked by James, , Fri Jul 15, 2011

Seems like the criteria are really high now, but I have 3 income sources, 2 from business that I own, and a consulting job. I talked to Chase, but they can't offer me anything, because it does not fit their criteria. Any recommendation?

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If your businesses have been going on for 2 years then you can qualify using the business income off of your tax returns, and if you've been doing consulting for 2 years (as reported on your tax returns) then your consulting job should also qualify (again using the income off of your tax returns). Less than 2 years, but greater than 1 year, may also be acceptable provided you had 2-years of employment in the industry prior to, with a history of income of at least the same level, and a CPA prepared YTD P&L statement.

How long have each of your 2 businesses been around for? How long have you been consulting and reporting that income on your tax returns?
1 vote Thank Flag Link Fri Jul 15, 2011
Sounds like you need someone who knows a little about creative financing. What you are seeking is not unusual. Find some deep pockets in your area to buddy up with you.
0 votes Thank Flag Link Fri Jul 22, 2011
It's best you talk to a lender that can really go though your whole scenario in detail and counsel you.
0 votes Thank Flag Link Sat Jul 16, 2011
The consulting income may be tough to use as your 2010 tax return would only show half a year's income, and you have another half a year on a YTD P&L, and there was a gap between your last job and your current job (which is also considered self-employed). Your 1 year & 8 month year old business should probably be able to qualify, as it'll probably be another ~60 days until you close, making it just shy of 2 years. If you are purchasing the property as non-owner occupied and there is a renter in there, then with Fannie Mae financing you do not need to have a 2-year landlord requirement in order to use the rental income to help you qualify... making you need less income from employment sources to pull it off.
0 votes Thank Flag Link Fri Jul 15, 2011
Thank you so much for your reco's. Sorry, I was not being clear. My wife and I are looking to purchase a vacation home/income property. (We have no landlord experience either)

It becomes tricky, because my consultant job just started after I left my full-time job which was about a year ago and there was a gap between them. I do earn more money from doing this than my last full-time job. I do have all the pay stubs to prove all my income.

Also, one of the business started about 1 year and 8 months, but again, I can also prove the income from both of them.
0 votes Thank Flag Link Fri Jul 15, 2011
Good info given below on qualifying. But why are your trying to get a home loan on your 2nd home? Are you trying to do a rate and term refinance to lower the rate? Cash out refinance?
0 votes Thank Flag Link Fri Jul 15, 2011
The underwriting guidelines by which income is calculated are very similar across most lenders and loan programs.

Nonetheless, given the multiple sources and types of income you are generating, the analysis needed to derive your income could be quite complex. It would not be surprising if your income may not have been calculated correctly by the person you worked with.

I would recommend that you have an experienced mortgage consultant also review your situation. You may get a completely different answer. At a minimum you should request that this person calculate how much additional income you would actually need in order to qualify.
0 votes Thank Flag Link Fri Jul 15, 2011
Good question. You might try a correspondent lender like REM or Bank of Commerce. You could also try a small local bank who might hold some of their own paper. I have a client who had similar issues and had success with a small local bank. There are also a few good brokers left who have multiple sources of investor money. You could try one of those as well.
Best of luck
0 votes Thank Flag Link Fri Jul 15, 2011
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