Actually, since 1099 income is considered significantly less reliable than w2 income, there is something different.
I am not a terribly high volume agent but I generally close more than one deal per month (it will be like 10-12 by June).
Currently, because business is slow, I am the top producer in my (rather small) office.
The next producer is our loan officer.
She has informed me that neither of us currently qualify for any sort of lending.
While we find this funny (and understandable, c’mon we work in real estate) it really means that a lot of people who should get loans or refi’s cannot.
Here is an example:
I have two clients (a couple) who just closed on a purchase.
The guy clears more than $175k (as a W-2 employee) from the business he is a partner in.
The girlfriend is a department manager for a manufacturing firm and makes noticeably less.
The boyfriend had to be pulled from the loan app because the company change its entity vesting a couple years ago (from an llc to a corp) and therefore the bank sees him as self employed.
He did not qualify for an 80% conventional conforming loan despite his boatload of income and greater boatload of assets.
Thankfully, the girlfriend’s bonus was enough to qualify by herself.
Bottomline, there are programs (of which I am sure HLS is well-versed) but it is really tougher than one might guess for those who are their own boss.
