[Housing] Getting approved for a loan due to unusual line of work

Housing

Looking for advice for how to proceed getting approved for a loan given my unusual line of work.

I work as a freelancer in the entertainment industry. That means money comes in from different companies, some as payroll, some as 1099 work. It also comes irregularly and in chunks. And it means that my accountant does his damnedest to make it look like I earn peanuts to minimize my tax liability.

This year I am on target to earn ~130k. Given my recent pivot in the industry into a higher paying position I expect that number next year to look closer to 150k. Unfortunately last year I earned just shy of 100k and on paper it looks like I earned about 75k, the year before that it looked like I made 90k. My problem is getting approved for a mortgage based on income level, I have the down payment covered.

Cash on hand: 24k Investments: 168k Debt (Credit card, student loan, auto, misc): Zero Credit Score: High 700s. Not including a Roth IRA. Technically I can pull from it, but I have zero interest in touching it.

Given the outstanding invoices and work lined up over the next few months I expect to save another 20k by the beginning of October.

I am looking for a home in the Eagle Rock / Highland park area (Zip 90041) at a price of 675k-700k. I am estimating my cost to get into the new home to look like this:

20% Down: 140k Closings Costs: ~16.5k Movers: 1k New Furniture / Minor Touch ups / Overlapping rent: 10k Total: 167.5k

As a renter my monthly budget is just about 3,500. As a homeowner, with this mortgage/taxes/insurance AND renting one bedroom out to my current roommate I am looking at a budget of just over 4,300. Obviously I have to qualify based on my income EXCLUDING a renter.

I feel like this is the right move for me right now. I'm comfortable with stretching my budget for a couple years to be somewhere I could see myself for a long time. With the LA housing market the way it is, interest ratings going up, and my non-rent controlled apartment jacking up prices every summer, this feels like a reasonable stretch.

I am very fortunate that my parents are willing to assist if that helps. Options that I can think of are: cosigning, using of of their two properties as a collateral on the loan, or a chunk of cash (probably not more than 30k). But they themselves are probably downsizing in the next 1-2 years so hopefully avoiding something that would make that more difficult for them. Is there a more inventive way I can use their support to secure approval?

Posted Jul 21, 2017, 10:04 PM UTC · edited

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