Will we have issues doing a cash out refi or loans with 1099?

Question

Purchased the first property now wondering what’s going to happen when we try to pull out money from under it due to not really having a regular w-2 job and it’s mostly 1099. Only good part is our primary residence is not under our name and we have no mortgages.

Will I have to file taxes and show more earnings? Or will they be lenient that the property is paid of and that will help?

I know everyone says start talking to people so I’m asking on here and will be calling local banks next week to try to build a relationship with one of them and get prepared for when we finish remodeling and have a renter in place that pays the first month or 2 before we try to get a cash out and buy another place.

Kerry Baird · Answer

My local credit union wanted to see less than the last conventional lender that I talked with. I'd start there, and ask. Bring your own financials to the conversation, including a pull of your own FICO from myfico or similar. This way they don't pull your credit all willy nilly.

Jeff Copeland · Answer

If you are self-employed, most conventional lenders will want to see at least two years of stable or increasing self-employment income (via your tax returns), in the same job (preferably) or at least the same profession. And they are likely to go through it with a fine-tooth comb at the moment, as lenders have been tightening their belts in light of the looming possible economic downturn.

Will we have issues doing a cash out refi or loans with 1099?

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