Are there mortgage lenders that offer loans to contractors / freelancers who can't show steady month to month income?

Asked by beckydono, San Francisco, CA Wed Apr 24, 2013

I'm thinking about buying my first home in San Francisco or Oakland. I have saved up enough for a 20% down payment, which I hope to use for a 2 bd property valued somewhere in the $500-600k range, and my credit score around 720. However my monthly income varies greatly because I am an indepedendent worker / freelancer, and I've chosen to take less work recently so my total income is also quite low. My intention is to rent the extra bedrooms to help with the monthly payments (my current roommates/friends would make the move with me) and leave me the flexbility to continue freelancing at leisure. How is this considered by mortgage lenders - do I look like a good candidate because of my solid credit rating and strong downpayment, or do I look like a huge risk because of my low income? Does it makes more sense to go for less of a property and use the savings for total monthly payments and not rely on roommates?

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Anne Hefley, Renter, 91505
Wed Apr 15, 2015
If you are still looking, try Privlo,
0 votes
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Thu Apr 25, 2013
What we need to know is that you have been doing this work for a minimum of two years.
With that, we need to see your tax returns for those years and the 1099s that go along with those filings.
We look at the gross income and your expenses for those years.
The average of the two years (bottom line after expenses and adding back depreciation) is taken and divided by 12 for a monthly income.
We usually run into trouble on this when the expenses cancel out any income reported.
Room mate income will only be considered, if you report it on your 1040s.
Hope this helps!
PS I am a lender, so please feel free to contact me with specific questions.
0 votes
Rob Regan &…, Agent, San Francisco, CA
Thu Apr 25, 2013
Speaking directly to a lender is your best bet and I can recommend some great ones. But my understanding is that rental income as you describe won't help you much - at least not nearly as much as it used to prior to the financial crisis of late '08. And low income is pretty much a deal breaker - although you haven't specified what "quite low" is for you.

A 10 minute phone consultation with a lender will likely help you understand how much income you need to have for the loan/purchase you want. Good luck - interest rates are incredibly low still, rents are incredibly high still, so I can certainly understand why you'd want to do this, but my guess is you'll need to ramp up your income to be able to pull it off.
Web Reference:
0 votes
Randall Ortiz, Agent, Sacramento, CA
Thu Apr 25, 2013
I work with a mortgage broker that has an office in San Francisco. Contact me if you would like his information. He would be able to let you know if anything could be done for your situation.
0 votes
Lizete Santos, Agent, San Francisco, CA
Thu Apr 25, 2013

It can discuss different scenarios and possibilities with a lender and they can let you know what may be suitable for your situation.

Here is a referral :

Sr, Mortgage Advisor
123 Mission Street,
Suite 850
San Francisco, CA 94105
P: 415-710-6651
F: 415-593-8927

Web Reference:
0 votes
Christina Ha…, Mortgage Broker Or Lender, Morristown, TN
Thu Apr 25, 2013

Lenders will take your yearly amount or your AGI, adjusted gross income, and divide that by 12. This will give you your monthly DTI...(Debt to income).

Best of Luck;

Christina Solorzano
CEO & SR Credit Repair Specialist at
Everlasting Credit Repair
0 votes
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