Cash-Out Refi Standards

[Sam Haack]

Hi all, does anyone know if the same kind of vetting is done for cash-out refis as is done for regular mortgages? This would for a primary residence that I want to access some of the equity in. My main concern is that I recently switched over from a full-time W-2 job to being fully 1099 and self-employed. Will this come up on a refi application and work against me? Thanks everyone!

[Stephanie Medellin]

@Sam Haack  The qualification process is going to be the same for a cash out refinance as it is for a purchase.  Sometimes you can qualify with one year self employment if you're in the same line of work  - for example an attorney that was previously W2 and then switches to 1099 with the same firm.  Even this will require a full year of self employment reflected on tax returns.  Otherwise, most lenders will need 2 years of self employment before they will consider the income "stable."  If you have a co-borrower, or another type of income, that could work.