Mortgages for self-employed consultants and 1099 contractors in Arizona.
If you bill clients on a 1099 and file a Schedule C, the standard mortgage path was not built for you. We qualify consultants on the cash you actually earn, not the slimmed-down number on your tax return. Here is how each path works.
Why does the usual mortgage path trip up consultants?
A salaried employee hands over pay stubs and a W-2, and the lender is done. A consultant earns real money, often more than a salaried peer, but the income shows up as 1099 payments, retainers, and project invoices spread across the year. On a conventional loan we have to use your net income after Schedule C deductions, not the gross you billed. That single rule is what catches most consultants off guard.
The good news: a conventional loan is only one of four ways we can qualify you. We start there because the pricing is usually best, then we run your numbers through the other paths and keep whichever one approves you for the most house. You are not stuck with the route your tax return suggests.
Which income paths can a consultant use?
Consultants get paid in different shapes, so we match the loan to the shape of your income. The table below lays out the four paths we compare, who each one fits, and exactly what we ask you to document. There is no rate column here on purpose. Rates move daily, and the right question first is whether the path qualifies you at all.
| Consultant income type | Qualification path | What we document |
|---|---|---|
| 1099 income | 1099-only loan | One to two years of 1099 forms. We use the gross figure on the form, so a clean 1099 skips bank statements entirely. |
| Business bank deposits | Bank statement loan | 12 or 24 months of business or personal statements. We total deposits and apply an expense factor of 50 to 75 percent to set qualifying income. |
| Profit-and-loss income | P&L loan | A CPA-prepared profit-and-loss statement covering the most recent period, often paired with a couple of months of statements to confirm cash flow. |
| Asset income | Asset qualifier loan | Documented savings, brokerage, and retirement balances. We convert eligible assets into a monthly income figure when your income is hard to show on paper. |
Most consultants land on the 1099-only or bank statement path. If your 1099s tell a clean story, the 1099-only route is the simplest. If you take a lot of write-offs and your real cash flow runs well above your taxable income, the bank statement path usually qualifies you for more. We model both and tell you which one wins.
What if I just started consulting?
This is the question we hear most. The two-year self-employment rule has a real exception, and it helps a lot of newly independent consultants. If you worked in the same field as a W-2 employee for years and then hung your own shingle, one year of consulting in that same line of work can be enough on several of our programs. The underwriter is looking for continuity in the field, not continuity with one employer.
Say you spent six years as an in-house marketing director, then went out on your own as a marketing consultant last spring. That prior experience counts. We can often qualify you at the one-year mark using your 1099s or deposits. A true career-changer with no prior background in the field usually has to reach the full two years first. Either way, we tell you the date you become eligible so you are not guessing.
How do write-offs change what I qualify for?
Write-offs are where smart tax planning and mortgage qualifying pull in opposite directions. Every legal deduction you take lowers your taxable income, and on a conventional loan that lower number is the one we have to use.
Here is the math consultants are surprised by. Say you bill $200,000 in a year and deduct $90,000 in legitimate business expenses. Your Schedule C shows $110,000. On a conventional loan we qualify you on that $110,000, which is about $9,167 a month. Drop the same write-offs into a bank statement review instead, and we look at deposits rather than taxable net. If your account shows $16,000 a month in deposits and we apply a 60 percent factor, that is $9,600 of qualifying income, and it climbs higher with a leaner expense factor. The deductions that cut your tax bill do not have to cut your buying power, because the bank statement path never sees them.
If you plan to buy within a year or two, loop your CPA into the decision before tax season. There is a real trade-off between minimizing this year's taxes and keeping enough qualifying income for the loan you want. Planning that on purpose beats discovering the gap mid-application.
Does retainer income beat project income?
Underwriters love steady money. A consultant on monthly retainers shows a flat, predictable deposit pattern that reads as stable income, which is the easiest case to approve. Project-based billing is lumpier. You might invoice $40,000 in March, almost nothing in April, then $25,000 in May.
That lumpiness is not a dealbreaker. A bank statement loan smooths your deposits across 12 or 24 months, so a strong year of projects averages out to a solid monthly figure. What hurts is a clear downward trend. Rising or flat income reads as healthy; a sharp drop from one year to the next is the pattern that raises questions we have to answer. If your income swings, the longer 24-month review usually tells a friendlier story than a 12-month snapshot.
What do consultants need to qualify?
- One to two years in the same field: One year can work if you did the same work as an employee first. A brand-new field usually needs the full two years.
- Credit score of 620 or higher: 620 opens most of our consultant programs. A stronger score widens your options and improves terms.
- 10 to 20 percent down: The exact figure depends on the path, your credit, and the property.
- Reserves: A few months of housing payment in documented accounts after closing.
- Clean documentation: Whichever path fits, we need the matching paperwork ready, whether that is 1099s, statements, or a CPA P&L.
We will run a quick read on where your income stands today and what it supports. If the numbers are not there yet, we will tell you what has to change and when to come back. For the deep dive on each route, see our 1099-only loans, our bank statement loans, or the path for people self-employed less than two years.
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Consultant mortgage Arizona — Frequently Asked Questions
Can a consultant get a mortgage with 1099 income?
Yes. We qualify self-employed consultants using 1099 income, business bank deposits, or a CPA-prepared profit-and-loss statement instead of tax returns. With a clean 1099, a 1099-only program can skip bank statements. You generally need credit of 620 or higher and 10 to 20 percent down. The right path depends on how much your write-offs lower your taxable income.
How do independent consultants qualify for a mortgage?
Independent consultants qualify through one of four paths we compare for you: a 1099-only loan that uses the gross figure on your 1099s, a bank statement loan that applies an expense factor of 50 to 75 percent to your business deposits, a profit-and-loss loan backed by a CPA statement, or an asset-based loan. We pick the path that gives you the highest qualifying income, then verify credit, down payment, and reserves.
Can I get a mortgage if I just started consulting?
Often yes. If you spent years in the same field as a W-2 employee and then went independent, one year of consulting in that same line of work can be enough to qualify on several of our programs. A brand-new consultant with no prior history in the field usually needs to reach the two-year mark. We review your background before you apply so you know where you stand.
Do consultants need tax returns to buy a house?
No. We offer mortgage programs that do not use tax returns at all. A bank statement loan reads your deposits, a 1099-only loan reads your 1099 forms, and a profit-and-loss loan reads a CPA statement. These are the paths most consultants use when heavy write-offs have pushed their taxable income below what a conventional loan would require.