Quote:
Originally Posted by ama06
I am a project manager in construction and have been for the past 5 years. I am 25. My mid credit score is 650. I have $21k in a asset acnt and have a little over $20k in my check acnt. In 2011 I made $50k, 2012 $60k, and this year I will pass $80K. My returns for 11 and 12 were both w-2's. In January 2013 my father offered me a position working for his construction company as a project manager but as an independent contractor. I understand that this converts me from w-2 to 1099. I have a contract with the company stating that I make $35 per hour, that I am paid bi-monthly, and that Im guaranteed a min of 50 hrs per week. I have scanned every check that I have received and stored them in a folder on my computer to show a steady income. I do not own any part of the company and I have no write offs. I signed a contract with Lennar and UAMC a month ago to build a home for $225K. They approved me for a FHA loan and I signed the contract based on the info I provided on the app and my credit score. I have not been asked to provide any documentation but Ive realized that in my app that under "Employer" I put my fathers company. I have snapped to that I am not employed by the company. Im an independent contractor. I am worried that once I am asked to provide documentation that the copies of my checks will not pass as a paystub, that UAMC will not approve me in underwriting bc I am now 1099 instead of w-2, and that I do not have 2 years of 1099 returns. Any chance that my contract with Lennar will be terminated? Or could things possibly continue?
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It shouldn't make a difference. I'm also 25 and a 1099 and have had no issues getting loans.
It shouldn't make any difference where your money has came from the last 2 years as long as you can provide proof if necessary that you have been employed that whole period (regardless by who). Whether you worked as a 1099 for your father or on a different job doing something else.
Do you know a lot about 1099 work? You do realize you will get penalized (aka fined) if you don't start making quarterly payments for your income tax. If you don't have any dependents or a ton of write offs, I would plan on saving 35% of every single pay check to put towards your taxes. Every paycheck I immediately transfer 35% to a separate savings account that is only used for taxes.