What kinds of documentation do I need in order to have a bank take my work-from-home income into consideration when it comes to home buying?
My fiance and I both work full-time jobs; I’m a teacher and he is an assistant manager in a retail store. However, I have also just begun teaching with VipKid and opened a shop on Etsy. What kinds of documentation do I need to keep track of in order to have a bank take this extra income into consideration?
You need your business license for Etsy and you need to do a 1099 form of the income that you have received.
A 1099 form, and a business license is needed for Etsy.
While I have not purchased a home, I have gone apartment hunting while self-employed. I would usually have the following ready when asked about my income:
- My last two years of income tax returns
- My latest checking account statement (to show recent income)
- A few recent pay stubs or invoices from freelance client work
- Copies of any contracts I had with ongoing clients.
(It was a lot of paper. Gotta love a good manila envelope to haul it around!)
Since you have a full-time job PLUS additional income, I’m curious as to what other homebuyers might recommend. What sort of documentation has VIPKid provided? Is that workload consistent enough for you to show a history of income coming in after a few weeks/months?
I just recently spoke with my lender about this. In order for a self-employment income to be counted in a mortgage pre-approval, you need to have worked that job for at least 2 years.