Getting a mortgage loan on 1099

[bspitt]

I currently work for a non-profit startup as a 1099 employee. It is a permanent position that has steady income (ie doesnt have the fluctuations that most 1099 contract workers experience). I agreed to be a 1099 employee to save my organization money on payroll taxes, but I am worried that loan officers are not going to see this favorably. I have been with the company for 7 months and can document the steady income. Will this still make it difficult to get a decent mortgage?

Some other pertinent stats:

myFICO score: 660 (should raise to ~700 this month after some erroneous derogs delete)

Annual income: 120k

credit util: 13% ($1115 balance on 4600 limit BoA, $0 balance on $2600 Barclays, $0 balance on $1000 Cap One)

No collections, 2 30 lates and 1 60 day late from over two years ago

[BrianB_The_Loan_Professor]

You can get a mortgage employed as a 10-99 but it is a little more difficult. You will need to show two years of taxes to prove the stability and consitency of the income

An average of the two years will be used to determine the amount you can use (unless the most recent years taxes are lower in which case they will use that number)

For now you are going to have to wait - or consider having them switch you to w2 if it is an option - if that happens you can use previous employment to create a 2 year work history and wont have to wait until you have been there a full two years to apply

Brian