My friend has been working "under the table" for 7 years now and has been making a steady $35k-$40k a year. He has recently divorced his partner (and is receiving approx $30k/year in alimony) and now needs to buy a house.
How should he go about getting a mortgage?
What kind of issues may he face?
If he were able to acquire a mortgage, how much would he likely be able to get?

EDIT Would it be worth legitimizing his business or is it too late at this point?

  • 5
    Presumably by "under the table" you mean your friend has paid no taxes and has no official record of their income? Mar 3 '17 at 2:16
  • 3
    To quote Khaled, "Your friend just played himself." That's the downside to trying to cheat the system.
    – JohnFx
    Mar 3 '17 at 2:17
  • @DJClayworth I guess so... I have updated my question to include the question of whether or not legitimizing their business would be worth it or if that won't change anything.
    – Gab
    Mar 3 '17 at 2:21
  • Welcome to Money.SE. You are talking about a single friend, the use of a plural pronoun is unnecessary and made the question painful to read. If you wish to change the pronoun gender to female, by all means add all the s's you need to. Mar 3 '17 at 2:26

Would it be worth legitimizing his business or is it too late at this point?

To be blunt, you're asking if we recommend that he stop breaking the law. The answer is obviously yes, he should be declaring his income. And it would probably benefit him to get on the same page as his employer (or client) so they can both start obeying the law together.

Once he's filed a tax return for 2016 that would certainly help his cause as far as a lender is concerned, and as soon as he can provide some recent pay stubs (or paid invoices) he should be ready to move forward on the mortgage based on that additional income.

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