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in Ione, CA
Self-employed buyers in Ione have two main paths to mortgage approval without W-2s. Both use your actual income instead of what you report to the IRS, but they verify it differently.
1099 loans work best when your tax forms show consistent contractor income. Bank statement loans dig into your monthly deposits when write-offs reduce what 1099s reflect.
Most Ione borrowers paying themselves through LLCs or taking aggressive deductions need bank statements. Contractors with clean 1099 income often close faster with less documentation.
1099 loans use the gross income shown on your 1099-MISC or 1099-NEC forms from the past two years. No need to send bank statements or profit-and-loss reports.
You average the income across both years after deducting business expenses listed on Schedule C. Lenders typically require 620-640 credit and 15-20% down.
This works when your 1099 income accurately reflects what you earn. Freelancers who don't write off much and contractors paid through staffing agencies often qualify easily.
Bank statement loans analyze 12 or 24 months of personal or business bank statements. Underwriters add up deposits and deduct obvious transfers or loan proceeds.
They calculate monthly income by dividing total deposits by the number of months reviewed. Most lenders apply a 50% expense factor unless you provide a detailed P&L audited by a CPA.
This option captures income that never appears on tax returns because of depreciation, mileage, and other deductions. Credit requirements run 620-680 depending on the lender.
Documentation splits these loans apart. 1099 programs need tax returns and 1099 forms you've already filed, while bank statement loans require scanning months of account activity.
Income calculation differs significantly. 1099 loans subtract Schedule C expenses from gross 1099 income. Bank statement loans use deposits minus a 50% standard expense ratio.
Rates vary by borrower profile and market conditions, but bank statement loans typically price 0.25-0.50% higher because of the extra underwriting complexity. Both require more down payment than conventional loans.
Go with 1099 loans if your contractor income shows consistent earnings across two years without major fluctuations. This path closes faster when your net Schedule C income supports the Ione home price you're targeting.
Choose bank statement loans when depreciation, home office deductions, or business expenses drop your taxable income below what you actually earn. This matters most for LLC owners and sole proprietors maximizing tax strategy.
Some Ione buyers qualify for both and pick based on which shows higher income. We run numbers both ways before deciding which file to submit.
Yes. Bank statements smooth out seasonal fluctuations by averaging deposits across 12-24 months instead of relying on annual 1099 totals.
Most lenders want two years for both programs. Some bank statement lenders accept 12 months if you have strong credit and reserves.
Rates vary by borrower profile and market conditions. 1099 loans typically price 0.25-0.50% lower because documentation is simpler to verify.
Yes for both programs. The self-employed borrower uses 1099 or bank statements while the W-2 spouse provides standard pay stubs and tax returns.
Most lenders require 15-20% down for both programs. Investment properties need 20-25% down regardless of which income verification method you use.