If one has unreliable income (ie: a freelance writer), will an underwriter analyze this as a risk?

Asked by Trulia New York, New York Mon Mar 4, 2013

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Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Mon Mar 4, 2013
BEST ANSWER
It's not so much that banks "prefer" for borrowers to have steady professions. They want to see stability. A borrower can have a 9-5 where they been at for a couple years and also have an additional income, this case "freelance writer", and as long as the borrower has claimed more or less the same amount of income from both sources over the past couple years, they'll be considered just as strong. I wouldn't say a lender is looking for people who have a full blown profession over someone who fits this scenario. They'll both be just as strong.
4 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Mon Mar 4, 2013
So do I get the best answer??? :)
1 vote
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Mon Mar 4, 2013
Freelance writer's income doesn't necessarily mean its unreliable. If the borrower has reported a consistent amount of "freelance writer" income over the past couple of years, it's likely that an underwriter would use it as effective qualifying income. Underwriters analyze all income, it's stability, trend and likelihood of the income continuing. What and how borrowers report their income on the federal tax returns is a huge indicator of just how stable or unstable such income is.

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648
1 vote
, ,
Tue Mar 5, 2013
While every lender's underwriting guidelines may vary, they will definitely require the previous 2 years of tax returns to ensure income has not declined. Also, the average of the past 2 years income will be used to determine your eligibility. If you'd like to discuss this scenario in greater depth please don't hesitate contacting me at your earliest convenience.


Kindest regards,


Paul Marzolla
Loan Officer
0 votes
Christopher…, Agent, Tarrytown, NY
Tue Mar 5, 2013
Hi, Absolutely. The banks lend based on your level of risk and ability to re-pay a loan. With this in mind they are going to be extra careful with inconsistent income. One of the requirements may be an extra years worth of tax documents so they can look for some sort of stability.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
William Raveis Legends Realty Group
914.406.9023
0 votes
Javier Menes…, Mortgage Broker Or Lender, Melville, NY
Mon Mar 4, 2013
Thank you Janet. I also feel that us Loan Officer should know enough about Real Estate sales, know Real Estate law, Realtors should also know some about mortgages as well.
0 votes
Janet Nation,…, Agent, Baldwin, NY
Mon Mar 4, 2013
Can't give you best answer Javier but can vote. Your second response is also correct. I'm not a loan officer of course but as a buyer's agent. I have become very knowledgeable about many of the lending guidelines.
0 votes
Diane Silver…, Agent, Stone Ridge, NY
Mon Mar 4, 2013
Banks certainly these days prefer one to have a steady profession rather than freelance work. My suggestion to you is check with your local bank or credit union. Good luck.
0 votes
Janet Nation,…, Agent, Baldwin, NY
Mon Mar 4, 2013
Javier is totally correct with his response.

Janet Nation, CBR
Sailing Home Realty
Direct: 646-321-9649
Office: 516-377-4760
Licensed Real Estate Salesperson
http://www.jnationproperties.com
0 votes
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