Advice applying for a home mortgage with 1099 forms but no tax returns

Phoenix, Arizona
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Advice applying for a home mortgage with 1099 forms but no tax returns

Jimmy Rojas
Member since 2020 · 151 posts · 41 votes

Planning to purchase in Phx,Az and surrounding areas, my equifax score is 700, experian 645,no debt whatsoever, have 1099 for 2022 and 2023 (required 2yrs), on my 1099s it says i make 135k per year, do not have tax returns (yea, yea), im planning to first start with my bank wells fargo.

This would be my first home and at 1st plan to live in it, possible house hack, going for a -$300k loan. should i go traditional, fha , i plan to be on a fixed rate so I dont get surprises later on.

In my situation, what down payment amount do you think will be needed .

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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
2y

@Jimmy Rojas - Simple solution, complete your taxes. You need your tax returns completed to get the best loans, especially traditional loans like an FHA or owner occupied loan. You will get exceptions on your income at small local credit unions and banks who will utilize your 1099 income over W2 income more loosly, nonetheless it all starts with you completing your taxes. Otherwise you will be restricted to DCSR or hard money loans and have to bring 20-25% down.

[email protected]781-964-3200Podcast Guest on Show 69 Doors from ONE Real Estate Deal Using Other People’s Money
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  • Andrew FreedBusiness Member
    Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
    2y

    @Jimmy Rojas - Simple solution, complete your taxes. You need your tax returns completed to get the best loans, especially traditional loans like an FHA or owner occupied loan. You will get exceptions on your income at small local credit unions and banks who will utilize your 1099 income over W2 income more loosly, nonetheless it all starts with you completing your taxes. Otherwise you will be restricted to DCSR or hard money loans and have to bring 20-25% down.

    [email protected]781-964-3200Podcast Guest on Show 69 Doors from ONE Real Estate Deal Using Other People’s Money
    3Reply
  • Mason WeissBusiness Member
    Realtor · Phoenix, AZ · Member since 2021 · 523 posts · 239 votes
    2y

    Hey Jimmy, let me connect you with my mortgage broker. We can get you a lower rate at a cheaper cost than Wells Fargo. I would also agree to get your taxes done so you can take advantage of only putting 3% down on your home purchase.

    [email protected]480-818-7745
    0Reply
  • Manny VasquezBusiness Member
    Real Estate Agent · Orange County · Member since 2022 · 318 posts · 293 votes
    2y

    Your mortgage lender may require you to file both 2022 and 20203 before extending a mortgage to you.   If this was your first year getting a 1099, then there might be a small chance that you could get away with just this year's 1099.....HOWEVER, since you have been 1099'd for 2 years now, then the mortgage lender may request tax returns before extending a mortgage.  Maybe a work-around could be showing "bank statements" that go back 2 years that corroborate your 1099 earnings?  Ask your mortgage-lender if there are any "work arounds".

    1Reply
  • Kyle Gardner
    Developer · Mesa, Maricopa County · Member since 2019 · 43 posts · 43 votes
    2y

    Get an assumable loan under 4%. Possibly house hack as well but the low rate is worth more than finding a "deal." Feel free to reach out if interested 

    0Reply
  • Lane Tucker
    Member since 2021 · 3 posts · 0 votes
    2y

    Jimmy I work as a mortgage broker down in Arizona. Would love to take a look at your situation and find the most advantageous way for you to starting acquiring properties. Most the comments in this post are accurate. Step number 1 will be to file your tax returns. It will be hard to get a loan from and financial institution if you’ve got the IRS breathing down your neck!

    0Reply
  • Christopher Robert Noland
    Investor · Seattle, WA · Member since 2023 · 87 posts · 44 votes
    2y
    Quote from @Jimmy Rojas:

    Planning to purchase in Phx,Az and surrounding areas, my equifax score is 700, experian 645,no debt whatsoever, have 1099 for 2022 and 2023 (required 2yrs), on my 1099s it says i make 135k per year, do not have tax returns (yea, yea), im planning to first start with my bank wells fargo.

    This would be my first home and at 1st plan to live in it, possible house hack, going for a -$300k loan. should i go traditional, fha , i plan to be on a fixed rate so I dont get surprises later on.

    In my situation, what down payment amount do you think will be needed .


    Lenders usually take your middle score of the three and it is not listed, so, that could be an issue if its lower than 660.. You need tax returns for conventional or FHA, if you want to go private or hard money, it is going to be 20 % down. If you are looking for creative financing solutions I might have some for you.

    0Reply
  • Lynn McGeein
    Real Estate Agent · Virginia Beach, VA · Member since 2012 · 2k+ posts · 1k+ votes
    2y

    @Jimmy Rojas A family member who failed to file taxes for many years reached out to the IRS and they assisted by providing his total reported annual income for over 7 years to make it easier for him to file back taxes (he couldn’t find his paperwork for most of it). They even provided penalty relief because he contacted them first. He filed years of taxes over a long weekend, and after a few months was ok for conventional loan. He had to pay back taxes, much lower than expected with the penalty forgiveness. There was also something about time for a certificate showing when lender checked on taxes. He did make an appointment and go into the local office, and they were very helpful. He pays on time every year now

    1Reply
  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    2y

    Since you have 1099 income but no tax returns, traditional or FHA loans may be difficult to obtain. You might consider bank statement loans or no-income-verification loans, which use your 1099s or bank statements to qualify.

    For down payments:

    • Traditional loan: Typically 5%-20%.
    • FHA loan: 3.5% down, but may still require tax returns.
    [email protected]941-914-7779
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