1099 Income Loans
Securing a mortgage can be a challenging task for self-employed professionals and freelancers who are paid via 1099 forms. Traditional mortgage guidelines often do not cater to the unique financial situations of these individuals, making it difficult for them to achieve homeownership. Our 1099 income loan option is designed specifically for these underserved borrowers, providing an alternative solution that uses 1099 earning statements instead of tax returns.
Loan Details and Eligibility
Whether you are looking to purchase, refinance, or invest in property, this loan option can accommodate your needs. The loan extends to owner-occupied properties, second homes, and investment properties without requiring tax returns. To qualify, borrowers must provide their most recent one or two years’ 1099 forms along with a year-to-date earning statement.
By leveraging 1099 earning statements, this loan option provides a viable pathway to homeownership for many gig economy workers, contractors, and other self-employed individuals. Explore how our 1099 income loan by Franklin Mortgage Holdings can help you achieve your homeownership goals today
Understanding 1099 Loans
If you are a self-employed individual, independent contractor or small business owner, it can be challenging to obtain a mortgage due to your non-traditional income sources and tax filing classifications. This is where 1099 loans come into play. In this explainer, we will discuss all the critical aspects of 1099 loans, including how they work, who is eligible, and what benefits they offer.
What are 1099 Loans?
A 1099 loan is a type of mortgage that is designed for self-employed individuals who report their income on a Form 1099. This loan type is ideal for independent contractors, freelancers, and small business owners who have trouble proving a steady employment and consistent income to lenders through traditional income verification methods.
How Do 1099 Loans Work?
Unlike traditional loans, 1099 loans do not require tax returns as the primary source of income verification. Instead, lenders can use bank statements and invoices to assess an applicant’s financial situation. Typically, 1099 loans have slightly higher interest rates compared to conventional loans, as they pose a higher risk to lenders. Additionally, 1099 loans may have a higher down payment requirement, ranging from 10% to 20%, depending on the borrower’s credit score and other financial factors.
Who is Eligible for 1099 Loans?
To be eligible for 1099 loans, you must be a self-employed individual or independent contractor who reports income using a Form 1099-MISC or 1099-K. In addition, you must have a credit score of at least 620, a stable income source for the past two years, and two years of self-employment history.
What are the Benefits of 1099 Loans?
1099 loans offer several benefits to self-employed borrowers. These benefits include:
Customized Loans: Franklin Mortgage Holdings offers customized loans tailored to individual borrower needs. We understand that self-employed individuals may have different financial needs and flexibility requirements, and we are committed to providing a mortgage that suits your unique needs.
Flexible Income Verification: With 1099 loans, you do not have to worry about providing traditional tax return documents as the primary source of income verification, making them a great option if you have non-traditional sources of income.
Competitive Rates: Although 1099 loans may come with slightly higher interest rates, they still offer competitive rates that are often on par with other types of non-conforming loans.
Quick Processing: With a streamlined application process, borrowers can receive processes and obtain mortgage approval quickly, which is beneficial when seeking financing for time-sensitive real estate transactions.
Apply for a 1099 Loan with Franklin Mortgage Holdings Today
If you are self-employed and looking for a mortgage that suits your unique needs, Franklin Mortgage Holdings’ 1099 loans may be the right option for you. With competitive rates, flexible income verification, and customized loans, we are committed to providing mortgages that help self-employed individuals achieve their homeownership goals. Contact us today to apply or learn more.