Having problems getting mortgage for first investment property

[Kane Rickman]

Here's the situation.. we found a great home which can easily become a 4 bed 4 bath close enough to a college so we can rent out two rooms easily.. we have had a job for two years but the problem is that the house is located an hour away from where we work and our lender says this will not look good to the underwriters especially since we don't make so much there (can't claim tips). Our real plan is to work the other job we already have set up which is in the same area.. but we can't really tell the lenders that because that obviously shows a lot of risk.. I need advice on how to by pass this in anyway.. is FHA going to be easier then conventional? Can we make it a investment property instead..? We could have 20% down but would have to pay our investor a pretty high interest rate.. instead we only have 4%

[Bill S.]

@Kane Rickman your lender is telling you they think it will be a hard sell to underwriting. You need to find another lender or rethink your plan. Since your lender is slow getting back to you it's because they have bigger fish to fry (they don't think your loan has a high chance of closing). 

Owner occupied has cheapest rates and lowest down payment (you qualify for the largest loan). 

Your occupation (contracting and restaurant work) are seasonal and in unstable industries. Lenders don't like them. In some cases you have to show two years of income or at least work in the field to have the income used for your loan qualification. You are in a tough place. It looks like you may be wanting to buy a bit more property than banks are willing to lend to you for.