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Old 06-25-2009, 11:15 AM
 
Location: Naples, FL
112 posts, read 159,882 times
Reputation: 44

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From what I have been researching, it will be impossible for us to get a mortgage in these times being 1099 employees. There is a slim chance if we get a cosigner who is a relative and who does not live with us. Is this correct? And if so....do we just rent forever? Or do we change jobs to become W2 employees for the sake of obtaining a mortgage eventually? What have others done?
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Old 06-25-2009, 02:07 PM
 
3,332 posts, read 7,386,818 times
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Quote:
Originally Posted by thecruzs View Post
From what I have been researching, it will be impossible for us to get a mortgage in these times being 1099 employees. There is a slim chance if we get a cosigner who is a relative and who does not live with us. Is this correct? And if so....do we just rent forever? Or do we change jobs to become W2 employees for the sake of obtaining a mortgage eventually? What have others done?
1099 employess have no problem qualifying for a mortgage as long as they claim sufficeint income AFTER expenses. If you 'write off' all your income with expenses, then yes you will have problems qualifying.

Yes, you can get a co-signer to make up for lack of income.
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Old 07-12-2009, 04:06 PM
 
2 posts, read 7,962 times
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Can I jump into this discussion? My husband and I are about to lose hope - we are in a similar situation!We sold our house in May, much faster than we had anticipated. This meant we were without a place to live! We immediately entered a contract to build our "dream" home. Not expensive, just equipped with all the things we want for our family of five...and in the same school district, etc...Just after we entered the contract, my husband was forced to resign because of the economy (or get laid off). He was a W-2 employee.Immediately, he began working for a family member as a 1099 employee making the same amount of money (actually more). Because the company is very small (3 employees total, including the owner), the employees are paid with 1099s instead of W-2s, even though they are basically "on call" 24-7 and drive the company van when responding to a call. This company has a contract with the county that specifies exactly how much the company will get paid every year and it is renewable for up to 5 years before it will need to be bid for again. They are in year 2 of the contract.I was recently licensed as an attorney, and began my solo practice. This, of course, means that I am a 1099 employee as well.Our lender now refuses to give us the loan until my husband switches to a job that pays with W-2s. Are we just out of luck? Is there NO way around this? Can I get a letter from a CPA that shows how much our taxes/deductions will be to prove our net monthly income?We are about to give up entirely and just live in a tiny apartment until one of us finds a W-2 job or we wait out the two years.This is ridiculous!! We have decent credit scores, we have owned a house before and never been late on a payment (for 5 years). Our income has not decreased at all since our last tax return, we are just paid in a different fashion.HELP!!!!!Thanks for any input...
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Old 07-12-2009, 05:58 PM
 
Location: Naples, FL
112 posts, read 159,882 times
Reputation: 44
I totally feel your pain. We are in the same boat and as of yet....don't have a solution. What we are hoping to do is find a house that is for rent that the owner would eventually be willing to sell to us 2 years down the road (or whenever??) we can qualify for a mortgage. It's really a quandry and quite frustrating considering we have great credit scores, a decent down payment and have a perfect rental record. UGH....We'd really like to take advantage of that $8k stimulous for first time homebuyers.
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Old 07-14-2009, 04:15 PM
 
392 posts, read 1,087,819 times
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1099 is tough... you are technically self employed. You get to expense costs against your income. Without seeing two years taxes and averaging your yearly income, the bank doesn't know what you actually make.


Stated income use to be the solution... but the government and consumers wanted the big bad banks to be stricter. So now they require everyone to verify their income. Unfortunately, that means that some good people are not going to get loans and will fall through the cracks.
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Old 07-14-2009, 04:19 PM
 
Location: Naples, FL
112 posts, read 159,882 times
Reputation: 44
It is tough indeed. I have 7 years with the same company as a 1099 and my husband has 4 years. A mortgage broker suggested that next year we not claim any write offs on our taxes and just pay the full amount in order to not chew down that bottom line. But jeez....the taxes will be hellacious so I don't know if that is our best option. It's just very frustrating.
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Old 07-15-2009, 10:14 PM
 
2 posts, read 7,962 times
Reputation: 11
Default Hope?

I just wanted to let you know that I called the lender, and he agreed that he would try submitting a letter from a CPA to the underwriters to see if they would push the loan through. This letter would detail projected deductions (e.g., no more than 2% of total income, etc...). In addition, he recommended I get a letter from my husband's employer stating that employees in his position generally have nothing to expense because all operating costs are paid for by the company, not the employees.

I thought this was good news! We're going to give it a shot...I'll keep you updated so you will know whether or not it will work for you too.
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Old 07-16-2009, 07:22 AM
 
Location: Naples, FL
112 posts, read 159,882 times
Reputation: 44
Good luck to you! Let me know how it goes and what you learn along the way. Keep hope alive!!!
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Old 08-24-2009, 04:38 PM
 
1 posts, read 3,803 times
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We too are in the same situation. We have three years with the same company, but can't get a loan because two lenders would only look at this past year when I did have W-2 income. I left that job to help build our business. Did not think it would cause us to not get a loan when we make more money now and have great credit scores. sure doesn't seem fair after all our hard work. Maybe
habitat will take us.
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Old 08-24-2009, 06:07 PM
 
Location: Naples, FL
112 posts, read 159,882 times
Reputation: 44
I hear your frustration. My husband left his job so that he could get on as a W2 with another company....at less than HALF the pay but we feel it's a necessary evil in order to get approved for a mortgage next year....we hope. Hang in there....
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