Driving for Uber is no longer a quirky pastime meant for a limited number of people who are interested in trying something new. Now, it is at least a part-time (if not full-time) job for many people. They view working for Uber as something that can help them earn enough money to pay their bills, and they are willing to give it a go if it means that they will be able to enjoy the kind of lifestyle that they have built for themselves.
Unsurprisingly, there are many people who get caught up in certain questions about how they will be able to operate as functional people when they are driving Uber and trying to do other typical things. One of the questions that often comes up is if they will be able to obtain a mortgage if they are an Uber driver. The reason for this question is simple.
They want to know if they can live like everyone else even as they drive around for Uber.
Independent Contractors Have Difficulties Getting A Mortgage
It can be challenging even for someone with a W-2 and traditional employment to get a job. Add to that the fact that independent contractors may have unstable income patterns, and it is entirely possible that getting a mortgage may be out of reach for some Uber drivers. However, this is not to say that it is necessarily completely impossible in all circumstances.
There are Uber drivers who own their own homes, but they have to work a lot harder at proving their income in order to do so.
One of the things that Uber drivers must do that some other people don’t necessarily have to worry about is putting up additional funds in the form of a down payment. A larger down payment is more assurance for the lender that the borrower is likely to pay their bills. This is to say that the lender can have more confidence that the money they lend out to a person who is putting up a significant downpayment is likely to be paid back to them over time.
If the Uber driver can manage to save up that kind of money, then they can certainly have a better shot at putting up the money that is necessary for a mortgage.
What Will Banks require In Order To Get A Loan?
There are certain requirements that banks put up in order for someone to get a loan. These include a few of the following hurdles that you need to keep in mind:
- You will need to show at least two years of tax returns
- You need proof of regular and steady income
- Bank statements from several years past
These are just the basics for getting a mortgage issued to you. Some lenders are going to take it even further and require even more from you. They will ask for anything that they need in order to feel comfortable lending money to you, and you should be prepared for the reality that you will have to turn over that documentation to them if you want to get the money that is necessary to purchase a home.
You may feel like they are prying into your life pretty deeply, but lenders will feel the need to do so in order to prove that you are someone who is worthy of the credit they are extending to you in the form of a mortgage. Failure to do that could land you in a very tight spot as far as getting your mortgage.
How Much Can An Uber Driver Get?
It is possible to get up to 95% of the value of the property that you wish to purchase if you have good credit and can prove that your income from Uber is stable and consistent. Some lenders even go so far as to say that they will NOT charge higher interest rates or inflict any other types of penalties on Uber drivers just because they are Uber drivers. Instead, they try to work with these people just as they would with someone who holds a traditional job.
However, the Uber driver will need to understand that they are taking on a mortgage that they will need to pay every month. As such, they need to be absolutely positive that their income is really stable and consistent. There is no point in pretending that it is when it is not.
This will show up and be very obvious if it isn’t as stable as they claimed that it would be.
The good news for Uber drivers who drive all the time is that they can potentially earn enough so that making their mortgage payments is not going to be that big of a burden for them. If they are able to consistently make rent payments right now, then they should rest assured that they can likely make their mortgage payment as well.
The tricky thing is that Uber drivers never know for sure when their costs may go up. They do not have any protection as far as what gas prices may do or when their car may be damaged and in the shop. Those are all factors that can weigh down on their ability to work, and that could cause some inconsistencies in their income.
If that is the case, then the scramble to make the mortgage payment every month is something that could be a big deal. Any Uber driver who is looking for a mortgage should carefully consider these factors as well.
How Much Uber Income Will Be Considered?
Banks will look at 100% of your Uber income as valid as long as you can prove that it is consistent. If you can show that your Uber income is consistent and valid, the banks will allow you to borrow the amount that you need in order to take care of your needs. Think about this as you are working on getting your mortgage application approved.
If you cannot show consistent income, you are going to have more problems getting a bank to approve your loan. They want your income to show up as consistent and they definitely want to see that you are making strides in the right direction as far as how much income you are generating every single month.
People who are worried about their ability to show a consistent pace with their income should try to wait a while before applying for a mortgage. If they can get their income into more predictable patterns, then this is ideal. After all, the bottom line is that they need to create a consistent pattern of overperforming as far as how much income they are able to generate.
From there, it will be up to the specific lenders to make their judgment calls about how much they are willing to lend.