How can I find lenders to give me a mortgage if my only income is 1099?

[Victor Nguyen]

I am a first time home buyer trying to start my real estate portfolio. My goal this year is to buy a rental property that I can lease as soon as I close or after some minor repairs. I am open to single family homes and duplexes. My only income is 1099s, which I write off a majority of it to lower my taxes. I have over two years of 1099s, a very high credit score, and enough capital to put down a 20% down payment on properties around $250k-$300k. The first lender that I went to for a loan just told me that they can not provide me with a mortgage because my income "on paper" was too low. What should I do in this situation? Is there any other loans that I should apply for?

[Erik Estrada]

Quote from @Victor Nguyen:

Quote from @Erik Estrada:

Hey Victor, 

This is a very simple fix. If you are buying a rental property and do not plan to live in it, you may qualify for a DSCR loan. Lenders will use the market rents or lease rents to qualify you instead of your personal debt to income ratio. Rates are very comparable to conventional.

If this is a primary residence you may want to consider a 12 months bank statement program. If you have been self-employed for 2 years lenders will use 12 months of your deposits into both your personal and business accounts as qualifying income. The expense factor will be dictated by your line of work. 

Thank you for the reply! I've heard about DSCR loans and have been looking into to it, but it seems you have to first own a primary residence in order to use it. Is that true? And if that is the case, what should I do if I do not own a primary residence?

 You do not need to own a primary residence to qualify. Lenders will want to verify you live somewhere else through various methods such as a utility bill, 12 months rent payments + lease, and/or a explanation regarding your current living situation