What is a 1099 Mortgage Loan?

A 1099 Mortgage loan is a type of home loan designed specifically for self-employed individuals, freelancers, and independent contractors who receive a 1099 form for their income rather than a W-2. These loans take into account the unique income verification challenges faced by 1099 earners, offering a flexible alternative to traditional mortgage loans that require extensive income documentation.

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Benefits of a 1099 Mortgage Loan

1099 Mortgage loans offer several significant benefits:

  • Flexible Income Verification: Allows self-employed borrowers to use their 1099 forms, bank statements, and other alternative documentation to verify income.
  • Accessibility: Provides access to home financing for those who might not qualify through conventional means due to irregular income.
  • Customized Loan Options: Tailored to meet the specific needs and circumstances of self-employed individuals and freelancers.
  • Potential for Higher Loan Amounts: Based on the total income reflected in 1099 forms and other financial documentation.

 

Who Qualifies for a 1099 Mortgage Loan?

To qualify for a 1099 Mortgage loan, borrowers typically need to meet the following criteria:

  • Self-Employed or Independent Contractors: Must receive income reported on a 1099 form rather than a W-2.
  • Consistent Income: Demonstrated consistent income over a period of time, typically verified through 12-24 months of 1099 forms, bank statements, and/or tax returns.
  • Good Credit History: A solid credit history and a good credit score, often around 660 or higher, to demonstrate creditworthiness.
  • Established Work History: Preferably at least two years of self-employment or independent contracting in the same industry.

 

Requirements for a 1099 Mortgage Loan

When applying for a 1099 Mortgage loan, borrowers need to provide:

  • 1099 Forms: 12-24 months of 1099 forms to verify income.
  • Bank Statements: Personal and/or business bank statements to show consistent income deposits.
  • Tax Returns: Often required to provide at least the last two years of tax returns.
  • Credit Report: A credit report to assess creditworthiness and ensure a good credit history.
  • Personal Identification: Valid photo ID to verify identity.
  • Profit and Loss Statement: Sometimes required to provide a year-to-date profit and loss statement prepared by a CPA.

 

A 1099 Mortgage loan is an excellent option for self-employed individuals and independent contractors seeking home financing. With flexible income verification and tailored loan options, these loans make it possible for 1099 earners to achieve their homeownership goals.

For more information or to start your application, contact MORTGAGEinc today, info@mortgage-inc.com!