I work 2 seasonal jobs and am steadily employed all year. Will I be able to get a mortgage?

Question

I work for a home improvement company in the summer and I drive home heating oil trucks in the winter. They are both stable gigs and I make between 50-60 K a year. I am trying to prequalify for a loan and was just told by a mortgage broker that because my employment is split, that they don't consider my situation "stable." Should I expect to run into this obstacle a lot, or should I keep shopping around?

On a side note, I am looking to qualify for an FHA loan for a small multifamily property.

Thank you

On a side note, I am looking to qualify for an FHA loan for a small multifamily property.

Thank you

Joel Owens · Answer

Cal with a mortgage broker they are making a small fee off of the loan.

The loan is sold off generally. With the last residential crash that happened layers have been added in for protection for the buyers of these loans on Wall Street.

There are "buy-back" provisions. In case of default the originator has to buy it back. This makes everyone only want VANILLA buyers that fit into a little box. Anything out of the box and expect to be looked at under an intense microscope. Guilty until proven innocent on residential loans is how many underwriters do things.

You do not have a long history yet of work and the work you do have is seasonal along with you want FHA with little to nothing down. That is the worst kind of income to qualify with.

As mentioned some local banks do not sell off the paper and keep the loans in house after originating them. This lenders can make their own rules but still have standards. There are some non-conventional lenders for your type of situation but if prevailing rate is 4% they want 8% and want 20% down or more instead of 3.5% to consider.

FHA might not work out for what you want to do.

Bill Gulley · Answer

Mehran is correct, you need at least two years of "Full, part-time" employment, sounds like the broker doesn't know or didn't want the extra processing details. Two employers shouldn't be an issue, it will be the time employed. (I will say, construction is tuff to show as it is seasonal and weather related and market driven, depends on what you do, but even when some work, they have cash flow issues that often leads to late payments, the cure for that is having reserves). Go to your bank, they can see your account activity and see what your deposits have been. :)

Ugochukwu Opara · Answer

Hey buddy,

I'm a real estate sales agent in Philadelphia.

I'm running into the same problem, with a slight twist. I have a mix of w2 income and 1099 income and my options are slim. I have to either get a full time 40 hour job and keep that for at least 6 months. Or I have to show two years of 1099 (self employed) income with $30k or more in earnings.

I love being an agent too much to rip and get a w2 job so I just do flips in the mean time and help other investors manage their property (property management) to prepare me to be a great landlord.

More power to you. I think you're in a better boat than I am on.

Mehran K. · Answer

How many years have you earned this amount from the same exact jobs and can show on paper? If you have 2-3 years, that should be stable enough. You should contact a few other brokers and see what they think.

Cal Mitchell · Answer

That might explain why the lender at my bank was more willing to work with me than the guy I just spoke with. Thanks for the tip.

Bob E. · Answer

If you are looking for an investment property see if you can find a tired landlord willing to sell with owner financing.

If you are looking for yourself I would still look for owner financing.  If you are a contractor and willing to do some work again look for a tired landlord, you can get a discount, do some repairs, and force appreciation.  Keep in mind if you are buying to occupy then you may have to be qualified under Dodd Frank's ability to repay.

In either case, get a large enough down payment to get the sellers attention while holding enough cash to make sure you can cover any needed repairs.

Good luck!

Cal Mitchell · Answer

Wow I didn't expect so many great responses. Helpful info on DECK at bigger pockets.

Hope this thread helps others in my position.

Shaun Weekes · Answer

Cal,

Joel brings up a great point and if they're retired you can use the social security income and any pension or permanent income they receive. If it's social security you can also gross it up 25% if it isn't taxed which is really cool.

So if they make $1,400.00 in social security income you can use $1,750.00 they don't have to put up the home as collateral. But if there's a mortgage payment or any payment on the credit report that will be included in the DTI (debt to income ratio)

I hope this helps Sir.

Cal Mitchell · Answer

I have a couple of family members I could ask, but they are retired. I'm guessing this mean the bank would require their house as collateral in that case.

Shaun Weekes · Answer

Hello Ugochukwu,

Has your mix been going on for more than 2 years? If so you should be able to get financing. Also since you're self-employed is your 1099 on your schedule C? If it is Freddie has a program for self-employed borrowers that only requires 1 year of tax return.

Find a really good Loan Officer to structure your finances so that you'll qualify. It sounds like it there and just needs to be massaged correctly.

I hope this helps and have a good one.

I work 2 seasonal jobs and am steadily employed all year. Will I be able to get a mortgage?

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