Self Employed - C2C

[Hopelives2]

Labeled as FTHB because technically I would be as I've not owned a home since the crash of 2008.  That said, I'm not looking at FHA backed home.

I was interested in learning what the impact would be on applying for a mortgage if done via bank statement loan or doing conventional with short W2 timeframe.

Looks like this (salaried at Big 4 firm for 2 years prior doing the same type of work)

2023:

C2C: Contract, Oracle ERP Implementation Program management | $105,000

W2: Contract, Oracle ERP Implementation Program management | $52,000

TOTAL:  $158k (only worked part of the year

2024:

C2C: Contract, Oracle ERP Implementation Program management | $244,100

2025:

C2C: Contract, Oracle ERP Implementation Program management | $148,800

W2: Contract, Oracle ERP Implementation Program management | $110,000

TOTAL:  $271k (only worked part of the year)

Blended over the 3 year period = $231,800 & change

Have a potential opportunity to go full time as perm employee WITH benefits (whoo hoo) at about $250k + bonus doing the same work I've been doing for 20+ years.

A mortgage broker I talked to said I wouldn't qualify for conventional because I would not be a new FT role for 2 years.

Then he brought up bank statement loan which makes my stomach sort of lurch - too many things that sound like what collapsed the housing market in 2008.

Looking at 10-20% down, 15 year preferred (likely pay off in 7 given my age and retirement thoughts)

Thoughts for you??

[ForwardLooking]

My first home, years and years ago, was financed using a no-doc loan because I was in a similar employment situation.  I don't think it is fair to relate them to the 2008 crisis as they are designed for the self-employed or people with unconventional income streams.  They usually don't follow Fannie Mae or Freddie Mac guidelines, so the bank doing the loans cannot sell you loan on the open market.  I remember application fees were a lot higher and my interest rate was higher too.  They verified my cash flow using financial statements and I also had to show proof of reserves showing I could still pay my mortage for a while if cash flow stopped.  It was not as easy of a process as the house I recently purchased via a conventional loan.  I would find out what your minimum down payment would be and then use the rest of the cash or semi liquid assets (i.e. stocks, bonds, CDs, etc) you have as a reserve.  They will be more concerned on your ability to go without income and still pay your mortgage than they will be concerned about a large down payment.  Hopefully, you can land that FT role you are looking for and refinance later with better terms.

[ShanetheMortgageMan]

You'll be fine to use your new full time W-2 employment + it's base salary to qualify, there are no requirements for you to be full time for 2 years before you can use it to qualify.  The mortgage broker you spoke with was incorrect, and from the advice they gave you I suspect they are inexperienced.   With an executed employment agreement/offer, you can even close before you begin working for your new employer.  I'd recommend you seek additional opinions.  

[Hopelives2]

Thank you, Shane. I was hoping you'd chime in and provide some guidance.

[ShanetheMortgageMan]

You're welcome, happy to help.