A VFX artist emails me:
Talked to my mortgage broker today about refinance and first thing he asked was if I was W2 or 1099 now – he said that he cannot get banks to do loans for 1099 workers.
My CPA who does my taxes offers audit protection but refuses to do it for my 1099 income. As I’ve said before, if you are forced to accept illegal misclassification as a freelancer you run the risk of being audited and now it seems it will be harder for you to get a loan now that banks are tightening standards.
I’ve also questioned the feasibility of owning a home if you are a VFX artist who is always changing jobs and moving around.
I found these links useful about other 1099ers trying to obtain mortgage loans:
If you’re a 1099, or contract, employee, or if you own your own business, you can still buy a home or refinance, but you’re going to have a tougher time proving that you’re financially stable. Lenders see 1099 contract employees as temporary, even if you’ve been “temporarily” employed for years in this manner. Self-employed individuals (and those who receive 1099s) will have to show stable income for at least two to three years, which is usually done through tax returns.