Went from being a 10-99 employee to unemployed to getting paid in cash. Will I be able to get a loan.?

Asked by Artfreelancer, Buffalo, NY Thu Oct 1, 2009

I spent two years as a 10-99 contract employee, then the economy dropped and my two main clients told me they could no longer afford to afford to pay me. I spent 1 year employed living off my saving and the generosity of my family. Now I have a job where I get paid in cash. I have detailed records of my earnings for this year in an excel spreadsheet as well as receipts for my expenses and pay taxes. Will the year I was unemployed and didn't file hurt my chances of getting a loan? I am a first time home buyer and my credit score is 756 and I am interested in buying a lot of 4 multiple rental units, one to live in 3 to rent out.

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Carlos Lieva…, , Chicago, IL
Thu Oct 1, 2009
Hey ArtFreelancer,

At a major lender you'll be required to provide your last 2 paystubs... in the case of being self employed just like the gentlemen below said, your last 2 years of net income will be averaged. However, an underwriter may ask for the last 2 checks where you were paid and if you're being paid cash you will not be able to meet this condition.

Best wishes,

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Robert Chome…, , San Diego, CA
Thu Oct 1, 2009
It does not sound like you are currently a w-2 employee. If you can't document getting paid in cash on your current job with paystubs or tax returns, it can't be counted. Also, if you are currently self-employed the lender will take your 2008 and 2007 tax returns and average the NET business income.
Web Reference:  http://socalfhahomeloans.com
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Aaron Lazenby, , Rochester, NY
Thu Oct 1, 2009
The answer to your question is most likely yes, you will have a difficult time obtaining financing. The reason is because most lenders require a 2 year work history in your field. As Jerry mentioned, there are "compensating" factors that could come into play to increase your chances of securing a loan such as substantial assets, excellent credit, etc. A qualified mortgage professional can properly assess your unique situation and see if you are able to get "pre-approved" with a lender. This will entail submitting your financials, along with a detailed letter of explanation regarding your unique situation. Feel free to let me know if you have any additional questions. Best of luck!
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Michelle & T…, , Buffalo, NY
Thu Oct 1, 2009
Dear Home Buyer in Buffalo, NY:

With all the constant changes in the financing world today, we are going to suggest that you speak to our mortgage lender regarding your situation. Terms seem to be changing daily with financing and it would be BEST to talk to her. She can get you pre-qualified right over the phone. If you would like for us to have her give you a call or for her to call you, please contact us and we can take care of that. It would be best for her to give you specifics as she is the professional in the financing field.

Thank you very much and we look forward to hearing from you soon!

Hunt Real Estate ERA
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Jerry Thomps…, Agent, East Aurora, NY
Thu Oct 1, 2009
yes you will have trouble, you may need to file this year and also prove a consistency of employement and income before you will get appoved, allthough one Thing I always say is never say never, as lenders look at your credit score, your income and debts, and your assets so if you have a large downpayment or other positive variables its possible, but in todays market your circumstances and much tougher to get a mortgage then in the recent past.

the best wat to find out is to meet with a lender and get a pre-approval run, if you need a recommendation or two let me know I'll be happy to point you in a direction.
Web Reference:  http://www.c21jerry.com
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