1099 Loans

What Are 1099 Loans?

A 1099 loan is designed for those who receive income through 1099 forms, rather than W-2s. This program focuses on assessing a borrower’s ability to repay through the evaluation of 1099 forms and other financial documentation.

Benefits of 1099 Loans

If you’re a freelancer or independent contractor, traditional loans may not suit your needs, causing unnecessary complications in your home-buying journey. Thankfully, 1099 loans offer an array of benefits to help you secure your dream home without the typical hassle. Here’s why this option could be the right fit for you.

• Streamlined Income Documentation: Instead of requiring multiple years of tax returns or W-2s, this program requires your 1099 forms for income verification. This speeds up the loan approval process and makes financing more accessible.
• Higher Loan Limits: Compared to traditional programs, 1099 loans often come with higher loan limits. This is particularly beneficial if your income is substantial but variable.
• Lenient Credit Score Requirements: While a good credit score is always advantageous, this loan option has more forgiving credit score criteria, offering a fallback if your credit history isn’t perfect.
• More Room for Debt-to-Income Ratio: Our 1099 loans offer a more generous debt-to-income ratio, giving you added financial flexibility.

Who Should Consider 1099 Loans?

• Independent Contractors: Those working for various employers as independent contractors.
• Freelancers: Individuals with various income sources.
• Seasonal or Gig Workers: Those whose income fluctuates and is documented through 1099 forms.

Requirements for 1099 Loans

Navigating the mortgage landscape as a freelancer or independent contractor can sometimes be difficult, but understanding the requirements for 1099 loans will help simplify the journey. This loan option has specific criteria designed to accommodate your unique income structure. Below are the essential requirements you’ll need to meet:

• Proof of Income: We require a minimum of two years of 1099 income which will be verified against bank deposits and a recent paystub.
• Credit Score: A minimum credit score applies. A higher score can increase your chances of securing a better interest rate.
• Debt-to-Income Ratio: We allow DTI ratios up to 55%. The lower your ratio, the more financially stable you appear and the better your loan terms will be.
• Down Payment: Expect to put down at least 20%.
• Business Documentation: If you’re a freelancer, you may need to provide additional documentation such as a business license or even a letter from an accountant affirming the stability of your income.
• Reserves: We require you to have at least 6 months of cash reserves in the bank. This acts as a safety net in case of unforeseen financial circumstances.
• Occupancy: This program is for owner-occupied properties only.

How to Apply for a 1099 Loan

Apply Online

1. Visit the website: First, go to the online mortgage application portal at Amres.com.
2. Complete the application: Next, answer some questions about your homeownership goals and personal information.
3. Gather Documentation: Prepare necessary financial documents, such as your 1099 and bank statements.
4. Loan Processing and Approval: Then, Amres will process the loan, conduct the appraisal, and provide a decision on approval.
5. Closing: Finally, after approval, you’ll proceed to closing, where you’ll finalize the loan and become the proud owner of your new home.

Apply over the phone

1. Contact an Amres Loan Officer: Start by connecting with an Amres loan officer to discuss your needs and options.
2. Gather Documentation: Prepare necessary financial documents, such as your 1099 and bank statements.
3. Complete Application: Next, your loan officer will guide you through the application process, ensuring all details are accurately provided.
4. Loan Processing and Approval: Then, Amres will process the loan, conduct the appraisal, and provide a decision on approval.
5. Closing: Lastly, after approval, you’ll proceed to closing, where you’ll finalize the loan and become the proud owner of your new home.

Conclusion

1099 loans provide a path to homeownership for those with non-traditional or variable income streams. By focusing on 1099 forms and a personalized approach to income verification, these loans create opportunities that might not be available through conventional mortgage products.

At Amres, we understand the unique challenges faced by independent workers and are here to help you navigate the 1099 loan process. Contact us today, and let’s explore how a 1099 loan can make homeownership a reality for you.