COMPLETE guide to mortgages for 1099 Employees and independent contracts

NOTE: U.S. workers are being drastically affected by the current outbreak of COVID-19. To skip to the section of this article that discusses the current COVID-19 and hits potential effects on independent contractions, click here.

Life as an independent contractor can be tough. You don’t have the usual support structure of an employee and your income is dependent on contracts and the availability of work. Things can become especially difficult if you apply for credit as a 1099 employee. Specifically with mortgages.

Are there mortgages for 1099 employees? And what if you are an independent contractor working in the U.S. on a visa? Can you still qualify? Here you can find the information you need regarding mortgages for independent contractors.

Can 1099 Workers Qualify for Mortgages?

The first question is can 1099 workers get mortgages? The short answer is, yes. But it’s a bit more complicated than just a simple yes. Don’t worry though, because after this you’ll understand how to get your mortgage.

The first step to getting mortgages for 1099 employees is prequalification. This is as simple as phoning your bank or completing an online questionnaire with the basic information on your Form 1099 income report, debt, and assets. These details should be able to give you a quick estimate of the amount you can afford to borrow to buy your home with.

Please note though, prequalification does not mean you are approved for a loan. It only helps you gather an estimate for the amount you can borrow. For instance, a real estate agent may ask for your pre-qualification letter from a lender to find homes that fit your budget. Once you’ve found the home you want, you can get your things in order to mortgage the property.

Documents Required for an Independent Contractor Mortgage

As can be expected, the purchase of a home has important legal procedures that need to be completed before you can become the rightful owner of the property. These procedures require specific documents. Your situation will determine the exact procedures you need to follow to mortgage your property and the documents you’ll need to go with it.

To get specific input on your unique situation, your best advice will come from legal and real estate experts like real estate agents and registered attorneys.

To give you a preliminary idea, however, here is a list of the documents required in the average mortgages for 1099 employees:

  • Immigration documentation – You are a foreigner working in the U.S. so you need to prove you are here on a valid visa.
  • Tax returns – Lenders usually want to see the 1099 income of sole proprietors. It helps to prove the salary you earn per year. Independent contractor tax declarations are also required here.
  • Other proof of 1099 income – People who don’t earn enough to justify a Form 1099-MISC (for each of the companies you work for) need to prove their income with things like bank statements, checks, or other proof of payments.
  • Business financial statements – Lenders would like to assess the state of your business to accurately judge whether you can afford your credit. They may also possibly require these documents to be prepared by professionals like auditors and accountants.
  • Business license – Some industries require professionals to have specific licenses. You should be ready to produce yours if your industry requires a license of some sorts.
  • W-2 forms and pay stubs – Only people who work other jobs, as well as their 1099 job, need to show their W-2 forms and pay stubs regarding their additional employment.
  • Bank account statements – Bank account statements can also prove your income to lenders. It can also prove to lenders that you have a sufficient amount saved for a down payment.
  • Credit card and loan statements – Lenders may want to know the state of your credit health. These documents can help prove it.
  • Letters of support – Some people may get an amount as a gift from a loved one or a relative to help finance their new home. A gift letter or a letter of support proves to the lender you will be receiving this additional support.
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How to Get Mortgages for and Independent Contractors

People who work for themselves have more difficulty applying for a mortgage than people who are employed. Here are a few things you can keep in mind which will help you apply for mortgages for 1099 employees.

Get Your Paperwork in Order

Applying for a mortgage requires lots of documentation and self-employed workers need even more than usual. Make sure you have the required documentation in place and have it ready. You don’t want to lose out on a golden opportunity because of something as simple as paperwork.

It’s Possible to Get Approved

Don’t think it’s impossible to be approved for a loan. Yes, self-employed workers have more paperwork involved in the mortgage application procedure. But that doesn’t mean you won’t get approved for the mortgage you need. Your income may also be a little lower, but lenders look at your net income (income after expenses) to determine whether you are eligible for a mortgage.

Keep Business and Personal Apart

Don’t mix your business and personal expenses. If you do it will become hard to track the true value of your business. It also makes it very hard to accurately judge your creditworthiness. Mixing these expenses can also have an effect on your credit score.

Keep A Healthy Credit Score

You are responsible for the mortgage. Lenders will look at your personal credit score to determine the interest rate on your mortgage. Keep on building a good credit score to get lower interest rates on the credit you apply for. Your credit score has a direct influence on the success of your mortgage application.

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Independent Contractors and COVID-19

While many employees in the U.S. are vulnerable to losing their jobs during the current COVID-19 outbreak, no workers are more vulnerable than independent contractors.

In addition to working on a case-by-case basis without a necessarily steady income, independent contractors can rarely afford healthcare coverage in the U.S. This combination of lack of work and lack of insurance can be very dangerous.

And with the current COVID-19 outbreak and it’s highly virulent nature, getting sick can lead to independent contractors being unable to work. Moreover, their lack of healthcare can mean longer recovery times and time away from work or worse.

It’s incredibly important, now more than ever, that independent contracts take the steps and measures to ensure their financial safety and for a potential health emergency.

How to Use a Stilt Loan for a Down Payment on Your Mortgage

Having a proper down payment greatly increases your chances of getting your mortgage application approved. But what can you do if you don’t have enough cash for a down payment? Have you thought of getting a personal loan for independent contractors?

You can use a personal loan for whatever you want to. Even to cover a down payment. Internationals working in the U.S. on a visa can also qualify for a personal loan. You just need to comply with the simple eligibility criteria as set out by the lender.

Stilt offers great personal loans to both citizens and non-citizens which start at an APR of 7.99%. You can loan up to $25,000. You can also repay the loan faster than what is required without getting an early payment penalty.

This is how it works.


Apply online for the loan amount you need. Submit your best application and remember that stronger applications get better loan offers.

Get Your Offer

Someone will contact you within 24 hours of your application. Please submit any additional information if required. Soon you’ll get your loan offer and a promissory note. Sign and return that note if you want to accept the loan.

Start Repayment

The loan is disbursed into your U.S. bank account within 2-3 business days. Set up your repayment method online. An autopay option will help you pay on time every time.

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It’s that easy!

Personal Loans

 for Independent Contractors!

Check Loan Options

Loans for up to $35,000. No cosigner required. No prepayment penalty.

7 Tips for Qualifying for a Mortgage as a 1099 Worker

Now that you’ve got your down payment sorted, let’s look at 7 more tips that will help you get approved for mortgages for 1099 employees:

  1. Watch your credit score – You need to keep track of your credit score. You can’t manage and improve something without knowing what it is. Pay your bills on time and follow other tips that can build your credit score.
  2. Review your last two tax returns – These two documents could help to determine your average monthly income. Add them up and divide it by 24 (the amount of months). This shows your average monthly income for the past two years. This will also help to manage your expectations regarding what you can afford.
  3. Reduce debt-to-income ratio – A high debt-to-income ratio may cause lenders to reject your application for a mortgage.
  4. Increase compensating factors – Some lenders may approve a below-average application for a mortgage if there compensating factors that increase the likelihood that you will repay the loan. Reasons like a large down payment, substantial savings, or minimal increase in housing expenses after the home is owned.
  5. Reduce your taxable deductions – Now this may sound hard to do. Certain independent contractors have many taxable deductions. But reduce it to increase your taxable income. A higher taxable income could convince lenders you are eligible for a mortgage.
  6. Get nontraditional loans – Avoid large out of state banks and rather go for nontraditional loans. Loans from credit unions or online lenders may fit your needs better. Large banks often don’t offer mortgages to visa holders.
  7. Apply your self-employed network – Use the network you’ve built up over the years to assist in your property purchase. You may perhaps know some real estate agents or have work friends that have already gone through the process. Ask for help in your network and get the best possible mortgage and property deal.


You don’t have to live in a rental for the rest of your life just because you are a 1099 employee. You can own your own home. Or perhaps you just want to buy an investment property. There are mortgages for 1099 employees and even visa holders are eligible.

If you want to boost your chances of success, take out a personal loan to increase the down payment on the property you want to mortgage. Who knows, it might be the compensating factor that approves your mortgage.

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