Can You Get a Mortgage With 1099 Income? (2025 Self-Employed Guide)

If you are self-employed, a freelancer, contractor, realtor, business owner, or gig worker, you may be wondering: "Can I qualify for a mortgage with 1099 income?"

The answer is yes — but qualifying can look very different compared to a traditional W2 employee.

At Tayton Capital, we help self-employed borrowers and independent contractors secure financing every day, including conventional loans, bank statement loans, and DSCR investment property loans.

What Is 1099 Income?

1099 income is income earned as an independent contractor or self-employed individual rather than as a traditional employee. Common examples include:

• Realtors
• Mortgage loan officers
• Consultants & freelancers
• Business owners
• Real estate investors
• Gig workers, sales pros & contractors

Instead of receiving a W2 from an employer, you receive a 1099 form showing non-employee compensation.

Can You Qualify for a Mortgage With 1099 Income?

Yes — many borrowers successfully purchase homes or refinance using 1099 income. However, lenders usually evaluate self-employed income differently because:

• Income may fluctuate year to year
• Tax write-offs can reduce qualifying income
• Business expenses impact debt-to-income ratios
• Income may appear less predictable

What Do Lenders Look For?

1. Tax Returns

Most conventional lenders want 2 years of personal tax returns and 2 years of business tax returns (if applicable). They calculate qualifying income based on your net income after expenses.

2. Income Stability

Lenders want consistent earnings, stable or increasing income, and ongoing business activity. A strong history in the same industry helps significantly.

3. Debt-to-Income Ratio (DTI)

Your DTI compares monthly debts to monthly income. Lower debt levels improve approval odds. See our terminology glossary for more.

4. Credit Score

Higher credit scores can improve approval chances, lower interest rates, and increase financing flexibility. See credit score requirements.

The Biggest Challenge With 1099 Borrowers

Many self-employed borrowers reduce taxable income through business deductions. While this lowers taxes, it can also reduce qualifying income for a traditional mortgage.

For example, a business owner may gross $250,000 annually but show only $80,000 net income after deductions. Traditional lenders typically qualify borrowers using the lower net income figure.

Mortgage Options for 1099 Borrowers

Conventional Loans

Best for borrowers with strong tax return income, lower debt, and higher credit. Often offer lower rates, lower down payments, and long-term stability. Explore our loan programs.

Bank Statement Loans

Bank statement loans allow borrowers to qualify using deposits instead of tax returns. Popular with entrepreneurs, realtors, business owners, and independent contractors. Lenders typically review 12–24 months of bank statements, average monthly deposits, and business cash flow.

DSCR Loans for Investors

Real estate investors often use DSCR loans instead of personal income qualification. They focus on rental income, property cash flow, and the debt service coverage ratio — allowing investors to scale without traditional income documentation.

Can You Buy an Investment Property With 1099 Income?

Absolutely. Many self-employed borrowers purchase rentals, Airbnbs, vacation rentals, and multifamily properties using DSCR loans, conventional investor loans, or bank statement investment loans.

Tips to Improve Your Approval Odds

• Maintain strong credit
• Keep business deposits organized
• Avoid large unexplained deposits
• Reduce personal debt
• Work with a mortgage broker who knows self-employed programs

Frequently Asked Questions

How many years of 1099 income do you need for a mortgage?

Most lenders prefer at least 2 years of self-employment history, though some programs allow 1 year in certain situations.

Can you get a mortgage with only 1099 income?

Yes. Many borrowers qualify using solely 1099 income.

Are mortgage rates higher for self-employed borrowers?

Not always. Conventional loans may offer competitive rates if you qualify traditionally. Alternative documentation programs may carry slightly higher rates depending on risk factors.

Can Realtors qualify for mortgages with 1099 income?

Yes. Realtors commonly use conventional loans, bank statement loans, and DSCR loans for investment properties.

Final Thoughts

Being self-employed does not mean homeownership is out of reach. Today, there are more financing options than ever for entrepreneurs, realtors, independent contractors, investors, and small business owners. The key is finding the right loan program for your situation.

At Tayton Capital, we help self-employed borrowers explore financing options tailored to their goals. If you are looking to purchase, refinance, or invest in real estate using 1099 income, our team is here to help.