Our 1099 loan is designed for self-employed and contract borrowers, allowing them to use 1099 forms to document various types of non-employment income earned during the tax year.
Yes. Instead of tax returns, we use the actual wages from their 1099 form as qualifying income for their new 1099 loan.
Documentation for a 1099 mortgage is minimal and typically includes:
1099s for the last 1 year from the same employer – Stability is the key to getting mortgage approval.
Paystub showing their YTD income -OR- Acknowledgement from their employer that their 1099 income matches what they report help us to know they can afford the loan. If they do not have a YTD paystub, a written Verification of Employment works too.
Proof that they do not have mandatory expenses – Mandatory job expenses differ from the optional expenses they write off.
Letter from their CPA regarding their expenses –Most 1099 contractors have expenses – it comes with the territory.
All borrowers, regardless of credit score, must have three months of reserves for a 1099 loan. Reserves are liquid assets available after paying the down payment and closing costs, acting like an emergency fund to show you can cover at least three months of mortgage payments if needed.
To qualify, these reserves must cover principal, interest, property taxes, homeowner’s insurance, and HOA fees, and be held in a liquid account such as checking, savings, CDs, or other liquid investments.
Contractors, salespeople, and consultants deserve the same mortgage opportunities as salaried (W-2) employees. As long as they can show steady income and the ability to afford the loan, they should qualify for comparable financing.
The 1099 loan makes it easier for self-employed borrowers to secure a mortgage. With no prepayment penalties on owner-occupied or second homes and the option to receive up to 6% of the purchase price for closing costs from interested parties, this program simplifies the process of buying a home as a 1099 employee.
To qualify, these reserves must cover principal, interest, property taxes, homeowner’s insurance, and HOA fees, and be held in a liquid account such as checking, savings, CDs, or other liquid investments.
Self-employed? Get the mortgage you deserve. Apply for our 1099 loan today and secure financing with ease.
