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FHA Loans with Combined W2 and 1099 Income
In Louisiana, can I do a cash-out refinance to pay off Chapter 13 Bankruptcy? Can I combine I099 and W2? What does the underwriter require? One or two years of 1099 and W2? I have one year of W2 and two years of 1099 income. Would I qualify?
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FHA Loans with Combined W-2 and 1099 Income
You can combine W-2 and 1099 income when applying for an FHA loan. This allows for a more comprehensive view of your earnings, especially if you have income from employment and self-employment.
Cash-Out Refinance to Pay Off Chapter 13 Bankruptcy
Eligibility: You may be eligible for a cash-out refinance to pay off a Chapter 13 bankruptcy, but there are specific conditions:
Chapter 13 Status: You must be in good standing with your Chapter 13 repayment plan and have made all required payments on time.
Time Since Filing: Generally, FHA guidelines require that at least one year has passed since the bankruptcy was filed. However, lenders may have additional requirements.
Cash-Out Limits: FHA allows cash-out refinances, but ensure that the amount you are cashing out is justifiable and meets FHA guidelines.
Income Documentation Requirements
Combining Income:
You can combine W-2 and 1099 income for qualifying purposes. This is particularly beneficial if your W-2 income is stable and your 1099 income varies.
Underwriter Requirements:
Documentation: Lenders typically require the following:
W-2 Forms: Generally, two years of W-2s are preferred, but one year may be acceptable if your income is stable.
1099 Forms: Two years of 1099s are usually required to show consistent self-employment income.
Profit and Loss Statements: For self-employed income, recent profit and loss statements may also be needed.
Tax Returns: Two years of federal tax returns can help support your income claims.
Qualifying with Your Income:
You may qualify with one year of W-2 income and two years of 1099 income, especially if your combined income meets the lender’s criteria. However, stability and consistency in your income will be critical factors in the underwriter’s decision.
In summary, you can qualify for an FHA cash-out refinance while combining W-2 and 1099 income, assuming you meet the other FHA requirements and your Chapter 13 bankruptcy conditions. It’s advisable to consult with an FHA-approved lender who can provide guidance based on your specific situation and assist you with the application process. Feel free to ask if you have more questions or need further assistance!