If you're paid on a 1099 (independent contractors, truckers, nurses on contract, real estate agents, consultants, rideshare and delivery drivers, tradespeople), a traditional loan usually averages the net income on your tax returns. After write-offs, that number can be far below what actually hits your bank account. Bank statement loans and other self-employed options are built for this situation. This guide covers how lenders usually look at 1099 income, what to gather, and where files get stuck.
Three ways lenders commonly look at 1099 income
Programs differ, but these are the usual paths:
- ✓Full documentation (tax returns). Lenders typically average the net income from your recent returns. This can work well if your write-offs are modest.
- ✓Bank statements. Lenders review 12 or 24 months of personal or business deposits and apply an expense factor or use a profit-and-loss statement, instead of relying on your returns.
- ✓1099-only programs. Some non-QM programs qualify on the 1099 forms themselves, with an expense factor applied. Availability and requirements vary by lender.
We'll look at your situation and tell you plainly which path, if any, fits.
What to gather before you call
- ✓Your 1099 forms for the last one to two years
- ✓12 to 24 months of bank statements for the account your income lands in (personal or business)
- ✓How long you've been self-employed or working on contract in this line of work
- ✓A rough idea of your monthly debts (car, cards, student loans)
- ✓What you want to do: buy a home, refinance, or buy an investment property
These go through our secure application when you're ready. Please don't email statements, tax documents or your Social Security number directly.
Five mistakes that slow down 1099 borrowers
- 1.Mixing personal and business money in a way you can't explain. Large transfers between accounts and cash deposits usually need a paper trail.
- 2.Big unexplained deposits. Expect to document any deposit that isn't regular income, such as a gift, a sale or a transfer.
- 3.Opening new credit right before you apply. New debt changes the math. Hold off on big purchases until after closing.
- 4.Changing lines of work mid-process. Lenders generally want to see a steady history in the same field.
- 5.Assuming you can't qualify because your taxable income is low. That's exactly what bank statement programs are for. Ask before you rule yourself out.
Bank statement or DSCR?
If you're buying a rental, a DSCR loan may be simpler, because it qualifies mainly on the property's rent rather than your income. For a home you'll live in, a bank statement loan is usually the better comparison.
Next step
Grab the free Self-Employed Bank Statement Loan Checklist, then start a conversation or book a call.
FAQ
Can I get a mortgage with only 1099 income?
Often, yes. Depending on the program, lenders may use your tax returns, your bank statements or your 1099 forms. Requirements vary, so ask us which fits.
How long do I need to be self-employed?
Many programs look for about two years in the same line of work, and some may consider less with a strong history in the same field. Ask us about your situation.
Do I still need tax returns?
Typically not for income on bank statement programs, but the lender may still need a signed IRS 4506-C form or other verification.
Is this available outside Idaho?
Business bank statement loans are available nationwide. Standard owner-occupied home loans are offered for Idaho properties only.
Nathan Jensen, NMLS #1692830 · Jensen Lending Team, Powered by Fulcrum Home Loans · Company NMLS #1926444 · Equal Housing Opportunity · 147 Main Ave E, Twin Falls, ID 83301 · (208) 405-5659
Equal Housing Opportunity. We are equal credit opportunity.
"Credit approval is based upon borrower meeting all underwriting requirements for a qualified borrower. Terms and conditions are subject to change without notice. This is not a commitment to lend."
Jensen Lending Team is a DBA licensed in Idaho and powered by Fulcrum Home Loans. For Idaho regulatory information, contact the Idaho Department of Finance, Consumer Finance Bureau.
This page is general information, not tax advice.