Question For Lenders Regarding W2's

[Francois G.]

Hey,

I was looking to get some advice from a lender regarding financing for a potential client I'm working with. Long story short, she was in the hospitality industry for years but now she wants to "work for herself" as an aftermath of Covid. She's quitting the hospitality position to become an insurance agent.

The issue is she's a first time home buyer who's looking to buy her first home by Halloween. From my experience, lenders are usually looking for 2 years of consistent income from self-employed workers which she obviously doesn't have yet. The hospitality position was a W2 position which is much better for her getting a mortgage.

My question for lenders is that even though she quit her W2 position in March, can't she still use her W2's from the last 2 years to apply for a mortgage? She might not currently work there but she has years of W2's to show consistent work history. She's also been collecting unemployment since March without any other income which I'm sure is going to hurt her also. 

Would the previous two W2's be sufficient enough to prove her work history even if she's currently not at the job? Obviously, in this situation it's probably in her best interest to apply for the mortgage while those W2's are still effective, correct? How bad does it look to lenders when unemployment insurance is the only income she's had since March (we're in a global pandemic so not sure if this is something lenders even consider)? I'm hoping on a call with my personal lender about this in 2-3 hours and would like to know how to approach it to give the potential client the best chance possible at qualifying. Any input is appreciated.

Thanks in advance!