Loans Self-employed and investors Mixed income loans
Mixed income loans: 1099 and bank-statement income on one loan
Some borrowers earn in two ways: contract work paid on 1099 forms, and a business whose income runs through a bank account. A mixed income loan counts both on one loan, each figured its own way.
New to this loan? Start here: Buying when you are self-employed A 3-minute lesson
Who it fits
Borrowers whose income comes from both contract work and a business: a nurse who takes 1099 contracts and runs a small shop, or a household where one borrower is a contractor and the other owns a business. Neither income alone may be enough, and tax returns may show less than either one after write-offs.
Many households here earn in more than one way: a contractor who also guides in summer, or a ranch family with contract work on the side. A mixed income loan lets the full picture count, as long as each income is documented its own way.
What it costs, plainly
Mixed income loans usually cost more than agency loans: a higher rate, a larger down payment and more money in reserve after closing. They are still the right tool when your tax returns do not show enough income to qualify and the two incomes together do.
So we start with your tax returns, the way an agency loan counts self-employed and 1099 income. If an agency loan works, it usually costs less. If it does not, a mixed income loan can, and once your returns show the income, a refinance into an agency loan is possible later.
Calculators and guides
Common questions
Why not use bank statements for everything?
If your 1099 payments land in the same account, they could be counted from the statements. Keeping the two apart lets each be figured its own way, and the expense allowance can differ between them.
Can a co-borrower’s W-2 wages count too?
With some lenders, yes, documented the usual way with pay stubs and W-2 forms. Lenders differ, so we confirm before you apply.
Is it more paperwork?
Somewhat. You provide both the 1099 forms and the statements, and the lender traces which deposits are which. Keeping business and contract money in separate accounts makes the review simpler.