Conventional loan

Best for borrowers with good credit scores.

Jumbo loan

Best for borrowers with good credit looking to buy a more expensive home.

Government-backed loan: FHA, VA, USDA RURAL

Best for borrowers with lower credit scores and minimal cash for a down payment.

Fixed-rate mortgage

Best for borrowers who’d prefer a predictable, set monthly payment for the duration of the loan.

Adjustable-rate mortgage

Best for borrowers who aren’t planning to stay in the home for an extended period, prefer lower payments in the short term or are comfortable with possibly having to pay more in the future.

Mortgage Loans for self employed and Contractors

There are mortgage loan programs that use Form 1099, bank statements, and profit and loss statements instead of conventional tax returns. These type of loans have cons such as:

• Higher interest rates
• Higher down payment
• Additional documentation
• Fewer loan options
• Possible prepayment penalties

These requirements may vary depending on the lender and the specific loan program. For accurate and up-to-date information, I recommend reaching out to a real estate agent specializing in these type of loans. Here are some common requirements:

1099

• Most recent 1 or 2 years of 1099 forms as proof of income.
• Credit History
• Documentation of year-to-date (YTD) income.
• Check stubs or bank statements dated within 120 days of the note date.
• 45% maximum debt-to-income ratio. Click Here
• 1099 transcripts only (full tax transcripts not required)
• Savings to cover downpayment (10% +) and closing costs (5%) over the property sale price.
• Verification of 2 years of employment history. Examples of employment verification include:
• (VOE): written Verification of Employment
• (CPA): a letter from a Certified Public Accountant

Bank Statements

• Must provide 12 to 24 months of consecutive bank statements from the same account.
• Credit History
• 10% down payment required with mortgage insurance
• Savings to cover downpayment (10% +) and closing costs (5%) over the property sale price.
• 45% maximum debt-to-income ratio. Click Here
• Minimum of 2 years self-employment or 1099 contract work with exception can be made to 1 year self employed if same line of work prior
• Self-Employment or Business Ownership: Bank statement loans are often favored by self-employed individuals or business owners who may have irregular income streams. You’ll need to provide evidence of your business ownership or selfemployment status, such as business licenses, tax filings, or other relevant documentation.

Profit and Loss

• Profit and Loss Statement of the most recent year.
• Business Documentation to verify authenticity and stability of your business
• Credit History
• Debt-to-Income Ratio lower than 45% Click Here
• Savings to cover downpayment (10% +) and closing costs (5%) over the property sale price.
• Other Documentation: In addition to profit and loss statements and business documentation, lenders may require other financial documents, identification, proof of residency, and employment verification.