Easier to refinance then to start with a mortgage? Bc I'm a W2.

9 Replies

Hi All, 

I am not sure what my options are in my situation. I may want to buy a $75k house as a buy and hold but I'm a 1099 versus a W2 in terms of my taxes and employee status. My wife doesn't make a whole lot of money but we get amazing benefits through her work, she works at a university. My question is, 2 part...

1. With amazing credit might I be able to get a traditional mortgage to buy the house? 

2. If not and I buy it cash will it be easier to get a loan to finance out or refinance out (not sure what the correct term is) to get my capital outlay out of the deal after a few (I hear 6 months) months. Basically I'll buy it cash but want to get my money out in a few months and have a loan on the property. 

What do you all think? 

Thanks in advance. 

The income/DTI requirements are the same for either one. 1099 income is fine, as long as your Net income is sufficient and you can show 2 years. it doesn't matter if you get paid by W-2 or 1099, if your gross is $100k and you "write off" $30k in expenses, your Net is $70k, which is used for qualifying.

As Wayne says...no difference in qualifying purchase v refinance...a mortgage is a mortgage.  If you can qualify for the purchase loan, do that versus spending your cash  and refinancing later.  I would also go to a credit union or small community bank (Farmers and Merchants) vs. a big box institution with this.  The loan size is well within their wheelhouse and they will be more inclined to work hard to make it happen for both of you.

It does not matter where you are at, you need to find a lender that is licensed in the state you will be buying in and find out if you can get approved now.  If they tell you yes, then you should proceed.

If they tell you no, then it will be the same answer when you try and refinance.  I would contact at least 2 lenders.

Thanks @Alexander A.  

@Charlie Fitzgerald I'm going to start looking for the right institution. By the way, I can't find an F&M in Indy itself. They are in other cities around Indiana but no where in or near Indianapolis.