Refinance with a 1099 loan

Rate-and-term refinance on a 1099 program

A rate-and-term refinance replaces your existing mortgage with a new loan at a lower rate or different term — without pulling cash out. The qualifying process mirrors a purchase: the lender averages your gross 1099 income over 24 months, applies a modest expense-factor adjustment (typically 5–10%), and confirms the new payment fits within DTI. There is no W-2 requirement, and the program does not force your income through the Schedule C net that conventional underwriting uses.

This path matters most for contractors who closed at a higher rate and now want to reduce their monthly payment, but cannot use a conventional refinance because their Schedule C income — after legitimate deductions — still falls below the conventional bar.

Cash-out refinance for business capital

A 1099 cash-out refinance lets you pull equity from a primary residence, second home, or investment property and receive it as a lump sum at closing. Contractors and commission earners use the proceeds for equipment, marketing, hiring, or working capital — often at rates below business loans or lines of credit. Cash-out LTV limits are typically lower than rate-and-term: most programs cap cash-out around 70–75% of appraised value, and reserve and credit requirements may be higher on cash-out files.

How qualifying income is calculated at refinance

The math is identical to a 1099 purchase. The program totals your gross 1099 income across all payers over the look-back period, divides to a monthly figure, and applies the expense-factor adjustment. A CPA letter documenting an actual expense ratio below the 5–10% default can raise qualifying income further. Multiple payers are aggregated — there is no requirement for a single primary client or a consistent year-over-year client mix.

Refinancing a Non-QM loan from another lender

Sunrise refinances 1099 and other Non-QM loans originated anywhere — not just our own. If you closed a 1099 or bank statement loan two or three years ago at a rate that now looks high relative to the market, the process is straightforward: fresh 1099s from the most recent 24 months and a new appraisal.

Break-even analysis

Before committing to any refinance, ask your officer to run a break-even calculation: closing costs ÷ monthly payment savings = months to break even. If you plan to keep the property longer than the break-even period, the refinance produces net savings. If you are likely to sell or refinance again sooner, the math may not work in your favor.