Question 1

Can I qualify with only one year of 1099 income?

Accepted Answer

Some lenders accept 12 months of history, especially with strong credit and larger down payments. Two years remains standard, but exceptions exist for well-qualified borrowers with consistent income patterns.

Question 2

How do lenders calculate my income from 1099 forms?

Accepted Answer

Methods vary by program. Some average gross receipts over 12-24 months, while others apply expense ratios to estimate net income. The calculation method significantly impacts your qualification amount.

Question 3

Do 1099 loans always have higher interest rates?

Accepted Answer

Rates typically run 0.5-2% above conventional programs due to Non-QM risk factors. However, strong credit, substantial down payments, and clean documentation can secure competitive pricing. Rates vary by borrower profile and market conditions.

Question 4

Can I use 1099 income from multiple sources?

Accepted Answer

Yes, lenders generally combine income from multiple clients or contracts. Consistent income patterns across sources strengthen your application more than sporadic high-earning periods from single sources.

Question 5

What documentation do I need to provide?

Accepted Answer

Expect to submit 1099 forms, bank statements showing deposits, and potentially profit and loss statements. Personal and business tax returns may be required depending on the specific program structure.

1099 Loans for Self-Employed Professionals in Industry, CA