What’s the best way to approach lending ?

Question

I am twenty years old and have been working seasonal work now for two years . I am a fisherman in Alaska during the summer and a mechanic for ski resorts in the winter traveling between the two I only work around seven months a year . I spend my off seasons traveling and have had around 6 w-2s in two years. My credit history length is around 2 years and my score is around 745 . I have saved enough to start and I know my lending application isn’t ideal wondering on thoughts for my best option to get started .

Sherief Elbassuoni · Answer

@Ben Jernigan, this is seasonal work. Some lenders will be ok with checking your last two years of tax returns, divide by 12 to estimate your average monthly income, and some other lenders will not be ok lending you money because jobs are not stable

Daniel Nobile · Answer

Hey Ben, welcome to Bp! House hacking is the best way for someone to get started in real estate investing in my opinion. House hacking gives you the advantage of low down payment loan options (3-5% down) compared to traditional investment properties that usually require a 20% down payment. A good house hack will significantly lower your living expenses so you can save the majority of your income from your job and give you hands on land lord experience. Im a fellow house hacker and real estate agent on the Househack Seattle team. Happy to chat more! I can recommend a few investor friendly lenders also that can help you with your pre approval.

Account Closed · Answer

You sound like you are in the Seattle area. Credit Unions understand the fishing season as do mortgage brokers. They will basically take your total yearly income and divide by 12 for a monthly income and work your debt to income ratio off of that. If you get paid shares at the end of the season, that would be what you present to the loan officer. I assume since you say you'e a fisherman, you are not affected by the cancellation of the crab season. If you are in crabbing, that could present a challenge.

Bradley Dosch · Answer

Hey Ben, sounds like you've been doing great preparation for a house hack! What issues are you having with financing? What is "not ideal" about it?

Nate Sanow · Answer

Treat lenders like dating when starting out. Don’t get married right away, and try another out if the first one isn’t what you were looking for. Eventually you do find “the one.” When I started I found so many lenders were so bad about making their money available and acted like it was so hard to get. Then eventually I realized that they ** really** want a loan, especially at the LO level. No loan, no payday. Know that, and use that to your advantage.

Jamie Rose · Answer

@Ben Jernigan - if you'd like to house hack or do investment in RE in the Anchorage area - I can connect you with some good local lenders that will help you get your options laid out.

Dave Skow · Answer

@Ben Jernigan- thanks for the post - your employment is classified as " seasonal " employment by lenders ...this scenario can be trick to get loan approval for due to jobs gaps and job changes . I would recommend 1) get pre approved using whatever scenario you want 2) if the seasonal income scenario isnt approvable - obtain a job that is more permanent that a lender will be able to use for qualifying you for a loan

Tyler Cobb · Answer

Well, if they are W-2 jobs, you could ask for the next company you work for to send you an offer letter that explains what you'll be getting paid. Some lenders are able to qualify the income that you are going to make. They are looking for job stability when they ask for W-2s, so you have to prove to them that you are going to pay back the loan. My recommendation is to call a few local lenders and see if they can use that offer letter to get you qualified.Hope that helps!

Scott E. · Answer

You shouldn't have a hard time getting financing to buy your first house... especially if you're just buying a house for yourself to live in.Call up a big bank and a local credit union and talk to a couple of loan officers. Your seasonal income is something that these banks understand. There are specific document requirements but they should be able to get it done since you've been doing this 2+ years.

Kaitlyn Beard · Answer

My best advice, as I started when I was 19 years old, is to simply start up conversations. Find a lender in your area. Find one that is real estate investor friendly, if you can, and call him/her. Simply tell them what you wish to do. It does depend on your goals. I didn't have an REI friendly lender for my first two homes. For the process of buying my third, it all started by a recommendation someone gave me on BiggerPockets and I called a recommended lender in my area and Boom! He sent me the application and all went well. Have this mindset:What's the worst that can happen? Lenders WANT to lend. It's their job! If it helps, read some books too that will help round your knowledge so you know how to find good deals, leverage your money and better yourself in sales. For your first house, you really don't need too much "game" to start. Feel free to ask me anything and I'm willing to help. Good luck!