Applying for first mortgage, question?

4 Replies

Hi!

I have been working in the same field for the last 4 years on 1099. In 2020 i incorporated my S corp. 

My question is: From a lenders view, seeing partial income now from a new S corp and 1099 still make me credit worthy or would they want to see the S corp mature for a few years?

Thanks!

Richard,

I'm not a lender but from my understanding they will look at all income and see whether it's comparable income due to the same profession.  What field are you in?  I think that might matter a little bit too, but an S-Corp will give you distributions (tax free) and the you'll pay yourself a w-2.  As long as you can show the proper tax returns and bank statements showing the 1099 is accurate and consistent, I don't think you'll have a problem since it's been for 4 years.

Originally posted by @Justin Hoggatt :

Richard,

I'm not a lender but from my understanding they will look at all income and see whether it's comparable income due to the same profession.  What field are you in?  I think that might matter a little bit too, but an S-Corp will give you distributions (tax free) and the you'll pay yourself a w-2.  As long as you can show the proper tax returns and bank statements showing the 1099 is accurate and consistent, I don't think you'll have a problem since it's been for 4 years.

 Thanks Justin! 

Originally posted by @Harjeet Bhatti :

@Richard Compian Lender will calculate income in two different ways. As long as you are in same line of work for 2 years. This will not impact on counting of your income. 

 @Harjeet Bhatti Thank you! that was the answer i was looking for.