Private lending is often the most creative and flexible solution for clients with non-traditional income. At Vaster, our private loan program allows investors to state their universal gross income to provide an overview of their capacity, while we rely on the property's equity to mitigate risk and offer short-term lending solutions. For clients with irregular income, bank statements showing cash flow from their business or personal accounts can help demonstrate their financial capacity. Over the past seven years, private real estate loans have proven to be a highly effective solution for my clients. This approach has enabled us to deliver short-term funding that supports successful real estate investments. It's all about tailoring creative strategies to meet unique client needs.
Great question. We had a client who was going from a w-2 to self employed in the SAME industry. Normally you would need two years of self employed income, but because he was going from a Software engineer at his previous employer, W-2 income, to a software developer for a company that he had started just six month prior, we were able to use his average income over the last 18 months including his W-2. Client was told by the "big box" lenders that he needed two years and we were able to successfully close his purchase on time with a very competitive rate.
Mortgage professionals often face unique challenges when working with clients who have non-traditional income, such as self-employed individuals, freelancers, or gig workers, but leveraging payment reserves can be a highly effective solution. By structuring a loan to include a reserve account-where additional funds are set aside at closing or from a lump sum payment-clients with fluctuating income, such as seasonal workers, can cover several months of mortgage payments. This approach not only provides financial stability during lower-income periods but also strengthens their mortgage application by demonstrating financial preparedness. The result is a win-win: clients maintain home-ownership without the stress of inconsistent income, and lenders showcase their flexibility and innovative problem-solving.