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If you’re freelancing as a W2 contractor at one place for a couple of months (which is common) then many banks consider this as an on-staff position and will give you a loan. I know two creatives who’ve successfully done this. Having a good credit score and an existing relationship with the bank also helps. Call your bank and ask their home lending advisor about this option.
SAD 1. This is not really a helpful or accurate comment. Working as a W2 freelancer is increasingly common in ad agencies. It’s comparable to being a full-time employee, except on a temporary, contract basis with fewer or no company benefits. The advantage over being a regular employee is that you get paid a higher rate, can work for multiple companies, and are not subject to the same rules as a full time employee. Point is, OP doesn’t need a full time job to apply for a home loan. That’s what this discussion is about.
there are some mortgage bankers/brokers - especially in LA who specialize in working with people in entertainment who have shifts in income from year to year but have sustained work. some are at banks and some are independent brokers. ask at your bank if there is someone who fits that profile as they understand freelance life.
Just pay with those buckets of freelance cash-ola.
I’ve learned way too much about this unfortunately. It’s totally dependent on what type of freelancing you’re doing. If you’re on a W2 working as a temporary employee and the employer will sign a VOE saying that you’re likely to continue at x average hours for the foreseeable future, you shouldn’t have a problem. Going through a local lender is easiest IMO. They seem to be the most flexible. If you’re an independent contractor/ LLC/ S-corp, it’s much harder. You need at LEAST a year of work history as self-employed, officially two years but I’m assuming you are freelancing in the same type of industry and they’ll usually let that slide with one year. If you worked freelance from Jan 2021-now, after you do 2021 taxes you should be able to find a lender who’ll work with you. If you didn’t… more than likely you’re waiting until post-taxes 2023 to buy a house. It absolutely blows. I made over $300k last year and can’t count any of it as income because it was my first year as an LLC. If I quit freelancing and took an agency job paying $100k they’d be throwing money at me, but without the W2 you’re untouchable.
If you have a partner and you’re on 1099. It’s a lot easier if your partner makes more to claim just them as the means of income. You’ll still get the credit check, a low interest rate, it will just show you’re income is 0 but you’ll still be responsible for the mortgage. Hope this helps — BOL 🙌
DM’ing you
Also interested in the responses to this! From my own research, it seems like you need 2 years of freelance income for most lenders.
I just wanna say that I’m pulling for you guys. It may take some digging for a lender, but it’s totally possible. I did it after two years of freelancing. My lender was smaller and local. That made it easier. Good luck.
In the same boat. Just shy of a year as an s-corp and feel like I’ve looked everywhere for a mortgage. Even the mortgage brokers who were mentioned above who work with unusual circumstances (influencer/Hollywood-types) weren’t able to do it without either 2 years of tax returns or 20% down. I have very good credit too! So, unless someone has found another solution looks like I’ll be purchasing once I’ve hit my 20% down number in my savings account. Pls ping me if anyone knows of an easier solution. Good luck out there!
Yep, as far as I understand you should be able to find a lender if you’re able to put a minimum of 20% down.
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US Bank was the most accommodating for us. Though they still required two years of tax returns for the freelance business. That seems to be standard. Also, tracking income/expenses in Quickbooks was critical as we had to provide Profit & Loss statements, accounts receivable, etc.
My partner is a stay at home Mom. Wish the lenders respected her hustle as much as I do!
Find a mortgage broker that works with multiple companies. Be as transparent as possible up front, they want your business as much as you want a house.
Uphill battle for sure. We moved in November, mortgage broker just left me off the financing like my contribution didn’t matter or the extra paperwork wasn’t worth the effort
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You want to look into bank statement loans. All they look at is how much money comes in. and out. it’s considered more riskier, so rates are higher. You can look into lenders who “look the other way” as well.