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in San Leandro, CA
Self-employed borrowers in San Leandro have two strong non-QM options for home financing. Both 1099 loans and bank statement loans help independent contractors and business owners qualify without traditional W-2 income documentation.
Choosing between these programs depends on how you receive income and which documents you can provide. Both options serve self-employed professionals in Alameda County who earn solid income but don't fit conventional mortgage requirements.
1099 loans work well for independent contractors who receive most of their income through 1099 forms. Lenders verify your earnings using your 1099 documents, typically from the past two years, without requiring full tax returns in many cases.
This option suits consultants, gig workers, and freelancers who maintain consistent client relationships. Your 1099 forms serve as direct proof of income, making the verification process straightforward when you have clear documentation.
The application process focuses on your 1099 history and credit profile. Many borrowers appreciate that lenders can qualify them without diving deep into business expenses or complex tax returns.
Bank statement loans analyze 12 to 24 months of your business or personal bank deposits to determine qualifying income. This approach works for self-employed borrowers whose tax returns show lower income due to business write-offs.
Business owners, real estate investors, and entrepreneurs in San Leandro often choose this route. The program looks at actual cash flow rather than adjusted gross income, which typically results in higher qualifying amounts.
Lenders calculate your average monthly deposits and apply a percentage to determine income. This method captures your true earning power when business expenses reduce your taxable income on paper.
The main difference lies in documentation type. 1099 loans require actual 1099 forms from clients, while bank statement loans use deposit history. Your income structure determines which documentation you can provide more easily.
Bank statement loans typically allow higher debt-to-income ratios because they capture gross deposits before expenses. 1099 loans may be more restrictive since they verify specific reported income amounts. Rates vary by borrower profile and market conditions.
Processing time differs too. 1099 loans often move faster when you have clean documentation. Bank statement loans require more analysis as underwriters review months of transactions to calculate qualifying income.
Choose 1099 loans if you work as an independent contractor with clear 1099 income from multiple clients. This option works best when your reported income accurately reflects your earning power and you don't have significant business deductions.
Select bank statement loans if you own a business with substantial write-offs that reduce your taxable income. This program makes sense for entrepreneurs whose bank deposits far exceed what appears on tax returns.
Consider your documentation accessibility. If gathering 1099s from all clients proves difficult, bank statements offer a simpler path. San Leandro borrowers working with SRK Capital can discuss which option maximizes their qualifying power.
Some lenders allow hybrid approaches, but most programs require choosing one documentation method. Your loan officer can determine if combining sources strengthens your application for San Leandro properties.
Rates vary by borrower profile and market conditions. Both programs typically offer similar pricing. Your credit score, down payment, and overall financial picture matter more than the program type.
1099 loans use your reported income directly. Bank statement loans typically calculate 50-75% of gross deposits as qualifying income, often resulting in higher amounts for business owners with expenses.
Most non-QM programs prefer two years of self-employment. Some lenders accept one year with strong compensating factors. Your Alameda County property type and down payment affect flexibility.
Both typically require 10-20% down for San Leandro purchases. Your specific down payment depends on credit score, property type, and loan amount rather than the income documentation method.