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Mortgage for a new 1099 employee

Hi, I recently (1 month) began working for a company and am payed as a 1099 contract employee, but I'm salaried. It is the same line of work I have been in for 20 years. My wife is also a 1099 employee and has 6 years of returns.

We are trying to buy a house and are finding it impossible to get a loan. We have excellent credit 770-780. We are looking to spend about ~200K for a house in KS and have about 10% down. Our combined income is around 110k, and we have very little debt.

Are there any lenders writing loans for 1099 employees without 2 years of returns?

Thanks,

Steve

Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

If you do not have income documentation for the last 2 years, it will be difficult for you to get a mortgage. The lender will want to check out your financial stability for the last two years and depending upon that you would get a mortgage. I don't think there are lenders who are giving loans to employees who do not have 2 years of returns.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

That's what I am finding. My income for the last 2 years was through a normal job, not contract, and I obviously have those returns. The 1099 thing is new to me though.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

smgarlett's picture
smgarlett | Joined: May 2, 2010 08:01 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Forgot to log in, the above post was from me.

One other question:

If I form an LLC and then pay myself with a W2, will the lenders then use that income or will it still be viewed the same as if I was a contract (1099) employee?

Thanks!

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

jburke's picture
jburke | Joined: March 9, 2010 02:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Smgarlett,

Your best bet is to try and get approved on just wife's income as she is the only one has the required 2 year history of being self-employed/1099.

Setting up an LLC and paying yourself w-2 will not work unless you commit loan fraud because the loan application has a specific box that is required to be checked if you're SE.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks. Definitely not going to do that, just a thought.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Im trying to get a VA loan but having problems because in 2011 I was a partner and given a k1 and in 2012 i decided to just become a employee of the company instead of partial owner but doing the same job and basically i have always been self emplyed. Having trouble though getting a loan because of this, anything I can do.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi mihill,

VA loans are only available to the veterans. Civilians cannot go for this kind of a loan. You should speak to the local lenders and check out if you can qualify for some other kind of a loan.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:54 | Post subject:

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