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My wife and I are looking at moving again and I'd like to buy if it's possible. I doubt it is, but I thought I'd give it a shot.

My wife works a normal job and brings in a steady, consistent paycheck. With only small gaps, this has been the case for several years. However, her income alone would not qualify us for much.

I do some contract (1099) work which brings in enough money that we would qualify for a mortgage. The problem is that my paychecks are very inconsistent. The smallest check was something like 10% of the largest one. The checks do come in consistently twice a month, though.

I started doing this last August (about 9 months ago). Before that, I was unemployeed (self employeed, really). Going back further, I held the same job for about 5 years ending in December of 2010.

Beyond this, we have some student loan debt and also some investment income (the two nearly cancel each other out).

Our combined income and debts would not be a problem for getting a mortgage. The only problem is that my income is not very conventional.

We live in Colorado.

Is there any way that I could qualify for a mortgage?

  • If that's the case, I may be in good shape. Thank you. – notlesh May 3 '12 at 17:57
  • I'd say you can definitely hope :-) Whether or not you can actually get it depends on the underwriting policies of the lender, which may differ. – littleadv May 3 '12 at 22:25
  • Good point. I'll do some shopping around if I don't like what i hear. Thanks! – notlesh May 3 '12 at 23:08
  • @DilipSarwate - That's an answer. I was about to write something nearly identical. Kill the comment, and submit. You got it right. – JoeTaxpayer May 4 '12 at 0:36
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As requested by JoeTaxpayer, my comment copied into an answer.

You will probably need to submit your tax returns for the past three years or more to the lender. The irregularity of your 1099 income during the year is not as relevant as the net income for each year. If the annual income is steady you have less of a problem than if your Schedule C swung between extremes even though the average is pretty good.

  • +1 - uh, good answer. This is how a bank will write a legit mortgage without employer income. – JoeTaxpayer May 4 '12 at 1:33
  • @JoeTaxpayer can you elaborate? Also, how different can things be between one underwriter and another? Is there some subset of rules that all underwriters follow? – notlesh May 4 '12 at 1:39
  • @stephelton All underwriters are engaged in the business of assessing the risk that the mortgagee will be unable to make the monthly payments and ultimately pay off the mortgage. Employment with a W-2 income (meaning steady income) reduces the risk, self-employment with varying levels of income is more iffy. The lender (bank) will likely sell the mortgage to a group of investors, and a less risky mortgage is an easier sell. So, standards do differ, and prospective mortgagees judged to be riskier are offered loans at higher interest rates or more points up front etc, or declined entirely. – Dilip Sarwate May 4 '12 at 12:14

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