Cant prove income for a mortgage lender

**calmhorizons** · 06-12-2009, 04:08 PM

Hi everyone,

My wife and I want to purchase a new home. About 9 months ago the company I worked at for 8 years went under and I was laid off. I have been working for a private contractor in the construction business for 8 months now and I get paid strictly in cash money, so I have no real way to prove my income to a lender.

My wife has a very decent job and has plenty of job history, but I"m the one with the excellent credit score. What are our options? Will lenders even give me a shot at getting a mortgage loan? The mortgage loan we want will be easily affordable for us and coming up with 10% down cash won't be a problem, nor the closing costs or any of that. The only snag here seems to be that I simply can't prove my employment on paper.

One option we were looking at is stated income loans but after doing some research online I really cant conclude if they are even still available from lenders these days. We're also worried that if it's going to be some process where a lender must have some kind of employment proof on my part then it might be many more months before I could show that and we dont want to miss out on the good interest rates and any of the 1st time home buyer credits/plans.

Any ideas what we can/should do?

Thanks

**Greg** · 06-13-2009, 07:02 AM

Talk to some local lenders and see if your wife can qualify for the loan on her own merit. At this point you don't exist so it will be up to your wife. you may not be able to get as much house as you would like but at least you can take advantage of the situation and get your foot in the door.

**calmhorizons** · 06-13-2009, 08:02 AM

That makes pretty good sense Greg. If we try to go that route I wonder if I could co-sign using my good credit. As a co-signer do you thing they will still have to see my employment history or will they just be concerned with my credit at that point?

**obxmls** · 06-13-2009, 02:37 PM

Greg makes some good points... but a co-signer has to qualify just like it was their loan. The alternative of paying taxes like you get a 1099 and quote a year to date income versus expense relationship might be an alternative that might allow them to count some of you income. Paying taxes is sometimes a good thing ;-O. As many bankers would tell you, it is income and everyone else has to pay them - why not you.

An FHA Loan may have some flexibility and as Greg indicated, you might have to settle with less house than you might have wanted.

Good Luck.

Bill - On The Outer Banks - obxmls.com

**calmhorizons** · 06-13-2009, 09:28 PM

Hmm I think what we might try to do then is put as much of my cash money as possible into the wife's bank and maybe that way if we do indeed strictly use her for the loan then at least it will show that she will have a bigger cash reserve on hand. Not sure if a lender will calculate that as favorable into the whole approval process. Anyone know?

**REITrainingWhse** · 06-14-2009, 04:35 PM

Originally Posted by calmhorizons

I have been working for a private contractor in the construction business for 8 months now and I get paid strictly in cash money, so I have no real way to prove my income to a lender.

So, getting "paid under the table??" That will cost you, in that respect. Now if your "employer" will give you documentation of what they have been paying you, you might increase your chances. Having bank statements could prove usefull as well, if you can verify your income. Now if you are spending as fast as you are making, or have nothing to show, well... you are really making it tough on yourself. Call around, send out requests on the Internet... You might find someone that will take stated income, but it will be a hard thing to find these days.

Originally Posted by calmhorizons

One option we were looking at is stated income loans ... We're also worried that if it's going to be some process where a lender must have some kind of employment proof on my part

Well, that is what stated income loans avoid... Proof of income. Now like I said, they are far and few between these days. Life was good in 2005 when I took out a bunch of these types of loans, when stated interest-only loans were the "fad-thing" Woohoo +CF to the extreme!

I suggest you get some proof of income... So, when it comes to tax time, will Uncle Sam not be notified by your employer (via 1099) what "activity" (shall I say) you had seen? Not judging, just letting you know that that type of activity has it's "perks" as well as "disadvantages."

Later.