The professional landscape is changing. More and more people are working as independent contractors, freelancers, or vendors either in addition to or in place of traditional employment. While this type of work can be richly rewarding, it can sometimes make it more challenging to find a home loan that works for your needs. Fortunately, many mortgage lenders are adapting to the growing demand by offering mortgage products designed for 1099 earners.

Conventional Mortgages for 1099 Earners

Most traditional mortgage programs require two years of 1099 income and tax returns for self-employed borrowers; however, there may be some instances where a 1099 borrower may be able to get approved with only one year of 1099 income documented. Nevertheless, even with somewhat flexible loan guidelines, 1099 borrowers may find that those flexibilities come at a premium. Higher interest rates help lenders balance the higher risk of loaning money to borrowers with less-predictable income; therefore, conventional mortgages may not always be the best option for 1099 earners.

FHA loans (mortgages backed by the Federal Housing Administration) also allow 1099 income; however, the FHA lender will likely also require two years of 1099 income and tax return documentation. Additionally, FHA lenders may contact your primary 1099 source of employment to verify that you are still a contractor with them and if they plan to retain your services. If you receive 1099 income from multiple sources, the FHA lender may contact your accountant (if you use one) to verify your sources of income. The bottom line is that, in most cases, whether with conventional or government-backed loans, 1099 earners will have to clear a few extra hurdles when it comes to getting a mortgage.

Simple Access™ 1099 Only Mortgage

Luxury Mortgage’s Simple Access™ mortgage products are a collection of home loan options designed to make home financing more accessible for borrowers who may not fit the typical mold. Self-employed borrowers, investors, or those who’ve had recent credit events may not qualify for traditional home loans. With the Simple Access™ home loans from Luxury Mortgage, non-traditional borrowers can have more options at their disposal. The 1099 Only program is a recent addition to our Simple Access™ line of mortgage products.

With Luxury Mortgage’s 1099 Only Program, 1099 borrowers who wish to apply for simple, affordable home financing can choose to exclusively use their 1099 income for their application. No other income verification is required under this program. This makes the application and approval process relatively fast and simple.

There are several beneficial features of the Simple Access™ – 1099 Only Program:

  • Loan amounts up to $3M
  • Interest-only feature available with 30-year term
  • DTI up to 50
  • Credit scores as low as 680
  • All occupancy types allowed
  • 7/1, 10/1 Adjustable Rate Mortgages available
  • 15, 30 Fixed Rate Mortgages available
  • Multiple financed properties allowed
  • Multiple 1099 qualification options

Required Documentation

To qualify for Luxury Mortgage’s 1099 Only Mortgage Program, borrowers will likely need the following documentation:

  • Most recent two years of 1099s
  • Documentation of year-to-date income
  • A CPA completed profit and loss statement or expense ratio letter
  • 1099 transcripts
  • a narrative from the applicant explaining the nature of their business and if/how it was impacted by COVID-19

Ready to Learn More?

Connect with us today for more information and a free rate quote on our 1099 Only Mortgage. 

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