If you are a loan officer or intimately familiar with the home loan process I could really use your advice.
Sorry for the long post.
TLDR: I exclusively do contract work and I have periods of time where on paper it looks like I'm unemployed, even though I have steady income history and tons of job opportunity. How does this look to a loan officer and how do I convince them to approve me for a loan?
I (27M) originally thought getting a loan would be an easy process, but I'm beginning to have some doubts. I have never bought a home. I have zero debt, and about 50K in the bank. Optimally I'd like to buy a duplex or triplex by sometime late next summer or early fall (August-October of 2024) with about 100K down and a budget of about 400-500K (that would be max, I'd love to get a bit of a fixer-upper for cheaper). For the areas I'm looking (Indiana, Ohio, Tennessee), preliminary research seems like this is a very feasible plan.
For my personal finances, I have had one personal loan in my entire life for about 36K and I currently still "have" it but it's got about 7K left on it and the savings account it pulls from has 12K in it. It's only 0.75% simple interest, so once I had more in the savings account than the loan was outstanding, I pretty much just put it on auto-pay and left it alone to build credit. This has worked well and I have an 800+ credit score. Other than that I just have three credit cards that I usually just pay off every couple weeks, I've never carried a balance on any of them. I'm afraid that when that loan drops off (September of 2024) my credit score will plummet (I could be wrong), but because of that, I would like to get approved for a mortgage before that happens.
Here's the real crux of the situation and why I'm posting this. I'm an engineer and I work for a union doing contract work. I bounce around from contract to contract and don't have a steady employer (it is still technically W-2 income, but I also dabble in a little bit of 1099 design work for this private company outside the union from time to time). It's very easy for me to pick up a job (especially right now, my industry is hurting for licensed engineers), but the work is in commercial shipping and to work we leave home. The norm in my industry is to work about 6-8 months out of the year and take the rest of the year off. When I am "off the ship", I am technically unemployed. It is going to be very difficult for me to apply for a loan when I'm working (in remote areas of the world, limited access to internet, etc.) so basically whenever I go to apply for a loan, on paper it's going to look like I'm unemployed. My last three years' gross income is as follows: 2020: 95K, 2021: 145K, 2022: 128K, 2023: not sure yet but probably about 120K. So I have a history of decent income. My main question is, how is a loan officer going to look at this? Given my income history, I didn't think it would be an issue, but my friend who does the same thing as me just had a hell of a time getting a loan and he's been killing it (last year he made 200K+). How do I explain to the loan officer that I am not really unemployed and I can literally call up my union and take a job anytime I want? (not an exaggeration, there's literally 90+ jobs on my union's job board right now).
Any general advice on the mortgage process and buying a MFH is also greatly appreciated. Thanks reddit fam!
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source https://www.reddit.com/r/RealEstate/comments/17th3nj/how_do_i_get_approved_for_a_mortgage/
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