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Help with W2 to 1099

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Help with W2 to 1099

I was told if I went from my current job being paid W2 to 1099 I would be okay as I am still working with the same company being paid DD.

Now I was just told this will hurt my mortgage as I will have to have two years at 1099. Someone please help! UGH 

Message 1 of 18
17 REPLIES 17
Valued Contributor

Re: Help with W2 to 1099

Find a sharp Mortgage Broker vs a Bank or CU. A well crafted letter from you Employer will also help. But yes generally you are now considered New Self Employed.
What type of loan are you trying to get?
Message 2 of 18
Established Member

Re: Help with W2 to 1099

We are looking at either a FHA also the 0 down with NFCU.

Message 3 of 18
Valued Contributor

Re: Help with W2 to 1099

My opinion with many years of lending and Underwriting experience is that you will be seen as newly Self Employed by the CU and FHA.
Have you already switched to 1099? It would be better to find and qualify now as a W2 wage earner and go 1099 at some future date.
Message 4 of 18
Established Contributor

Re: Help with W2 to 1099

Hello Syke77

 

Think carefully before you leap into the abyss of self-employment.  I can't tell you how many homebuyers hopes were dashed over the years after they moved from a W2 wage earner to a 1099 independent contractor (self employment). I would strongly recommend to discuss this with another LO, you will be a "No Go" with a FHA for sure if you move to 1099.

Mortgage Banker - Since 1988 offering FHA, VA, USDA, Conventional, Jumbo and Portfolio Loan Products. Licensed in AL, AZ, CA, FL, GA, IL, IA, IN, KY, LA, MI, MO, NC, NE, NV, NJ, OH, OK, OR, PA, SC, TN, TX, VA and WI.
Message 5 of 18
Valued Contributor

Re: Help with W2 to 1099


@Skye77 wrote:

I was told if I went from my current job being paid W2 to 1099 I would be okay as I am still working with the same company being paid DD.

Now I was just told this will hurt my mortgage as I will have to have two years at 1099. Someone please help! UGH 


What kind of work are you doing & how long have you been with your employer?

 

 

VA Mortgage Expert. Mortgage Banker lending in All 50 States.
VA, FHA, USDA. Jumbo, Conventional.
CAIVRS Expert.
Message 6 of 18
Member

Re: Help with W2 to 1099

I have been with them 4 years as of August a small trucking company I do all the office work Bookkeeping AP/AR Insurance/ Payroll you name it. Nothing has changed I just work under 1099 now... I can't change it now as it started in June and we can't go back. I just don't understand how it matters if I'm still working with the same company. They have made it impossible for people to do anything out of the norm. I told my boss and he feels guilty but of course this changes nothing now. 

Message 7 of 18
Established Member

Re: Help with W2 to 1099

I also still have to use a Timesheet service to clock in out to keep track of hours worked so everything is still as a regular job except I pay my own taxes now.

Message 8 of 18
Valued Contributor

Re: Help with W2 to 1099

Now you have no benefits, no social security paid by employer and are still treated like an employee. In some states (maybe most) your employers avoidance of legally required taxes for employees is likely illegal. You took a drop in pay
is the bottom line.

I’m so sorry, you are newly self employed.
Message 9 of 18
Established Member

Re: Help with W2 to 1099

Never had any insurance or benefits. All drivers are owner operators so I was the only actual employee on the books so he is not required to offer the benefits. So no it wasnt6a pay drop for me. It also made it easier for me as I am now raising my grandson. It was in fa t a good move for me but maybe not in the mortgage area.
Message 10 of 18
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