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Independent contractor and loan was recently declined due to employment being viewed as "unstable". What can I do to improve this, or shall I try another lender?

by gregg571 from Reamstown, Pennsylvania. Sep 14th 2016 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,802 contributions

More info needed, but in general, Lending guidelines mandate that for qualifying income to be considered, you have to prove (via tax returns) that you have been receiving income as an "Independent contractor" for the past 2 years or more.. if your year over year income is increasing, then the lender will use the 24 month average as your qualifying monthly income. if your year over year income has decreased, then they will qualify you on the last 12 months for qualifying income.. if there is a large reduction in income year over year, then the lender can turn your file down for "unstable" income.. The guidelines are pretty clear when it comes to borrowers who are not paid by the hour or salary.. but it's up to the underwriters discretion as to what constitutes a "large, year over year, reduction" in income.. Some might say 20% or more is excessive, while others might say 35%.. Since it's subjective, we would really need to know all the details and have a story that we can present to the underwriter.. That all being said, It's impossible to say if another lender can help or not without looking at your complete loan scenario.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Sep 14th 2016
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