1099 Income Mortgages for Independent Earners

Yes. On the programs I use, several clients are fine. The lender adds up every 1099 for each year and works from the totals, so five clients at $60,000 each count the same as one client at $300,000. What matters is that the income is documented and likely to continue. A client you have billed for years carries more weight than one you picked up three months ago, and income from a client who has stopped paying you may be left out. Your year-to-date proof (a statement, invoices or bank deposits) shows the lender your clients are still paying. Bring every 1099 from the last two years and I will sort out which ones help.

Most programs average the two most recent years, so a big jump gets blended with the slower year before it. That is the conservative default, and it still gives you credit for the growth. Some programs I access can qualify you on your most recent year alone when you have two years in the same line of work. After a breakout year, that can mean thousands of dollars more in monthly qualifying income. Your year-to-date earnings are what make the case: if this year is tracking at or above last year, the higher number is easier to use. I will check your file against both methods and show you the difference before you apply.

No. A dip is common for commission earners and contractors, and lenders see it every day. When income goes down, the lender usually stops averaging and uses the lower, more recent year, so plan around that number. You will also write a short letter explaining what happened, like a contract that ended, a market slowdown or time off for a new baby. The key is this year: if your year-to-date income has steadied or turned back up, the file reads as a one-time dip. If income is still falling, the lender may not be able to count it, and we would talk about timing or a different program. Either way, I will tell you where you stand before anyone pulls credit.

Often, yes. On the programs I access, the requirement is two years in the same line of work, not two full years of 1099s. A nurse who moved from a hospital staff job to travel contracts, or an engineer who left a firm to consult for its clients, usually counts as the same line of work, and the W-2 years count toward the history. You will need your 1099s since the switch, your W-2s from before it, and year-to-date proof of income. Changing fields at the same time you went independent is harder, because the history starts over. Some programs do want two full years of 1099s, so I match you to the ones that count your W-2 time.

Not on a 1099 loan. The program counts what is reported on 1099 forms, so money without a form doesn't make it into the math. This comes up more than it used to: starting with 2026 payments, a client only has to send you a 1099-NEC once they have paid you $2,000 or more in the year (IRS instructions). If a meaningful share of your income arrives without a 1099, a bank statement loan may count more of it, because it works from the deposits on 12 months of statements. You can also ask regular clients for a 1099 even when they aren't required to send one. I will look at both before we choose.

It depends on where your income shows up. A 1099 loan counts your gross 1099 totals, and on the programs I access nothing is taken off for expenses. A bank statement loan counts deposits on 12 months of statements. Business account deposits are usually reduced by an expense factor, often 50%, while personal account deposits can count in full. So if $300,000 a year arrives on 1099s, the 1099 loan counts all $300,000, while the same money run through a business account at 50% counts $150,000. If a lot of your income never lands on a 1099, the bank statement loan may see more of it. I run both for every self-employed client before we pick.

Yes. The programs I access cover primary homes, second homes and investment properties, for purchases, cash-out refinances, rate-and-term refinances and delayed financing. The rules tighten a bit as you move away from the home you live in. Investment properties usually need a bigger down payment and more reserves (money left in the bank after closing) than a primary home, and the same goes for a second home with some programs. A second home needs to be a place you use yourself, not a full-time rental. Tell me how you plan to use the property and I will match you to the program with the best terms for it.

Yes, and plenty of my clients plan on it from day one. Traditional loans qualify you on your tax returns, so the move makes sense once your returns show enough income to support the loan, usually after two filed years. When that happens, a traditional refinance may lower your cost. On a home you live in, including a second home, federal rules generally don't allow a prepayment penalty on this type of loan (CFPB, Regulation Z 1026.43). Investment property loans can carry one, so we review that before you lock. When the time comes, I will compare the savings with the cost of refinancing and tell you straight whether it is worth it.