Loading
in Chico, CA
Most Chico lenders want W-2s. If you're self-employed, that kills deals fast. These two non-QM loans exist specifically for borrowers who earn outside the traditional payroll system.
Both skip tax returns as the primary income proof. But they work very differently — and the wrong choice can cost you approval.
A 1099 loan uses your 1099 forms to verify income. Lenders typically average one to two years of 1099 earnings to qualify you.
This works best for pure independent contractors. If most of your income shows up on 1099s — not in a business account — this is the cleaner path.
Bank statement loans use 12 or 24 months of deposits to calculate your income. Lenders apply an expense ratio to determine qualifying income.
This suits business owners who run revenue through a business account. High gross deposits — even with large write-offs on taxes — can still qualify you.
Local decision guide
Use this comparison to weigh 1099 Loans and Bank Statement Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Chico.
Most Chico lenders want W-2s. If you're self-employed, that kills deals fast. These two non-QM loans exist specifically for borrowers who earn outside the traditional payroll system.
Both skip tax returns as the primary income proof. But they work very differently — and the wrong choice can cost you approval.
A 1099 loan uses your 1099 forms to verify income. Lenders typically average one to two years of 1099 earnings to qualify you.
The core difference is how lenders see your income. 1099 loans read your forms directly. Bank statement loans read your cash flow.
Bank statement loans can qualify higher income for borrowers with strong deposits but heavy write-offs. 1099 loans are simpler — but only work if your 1099 income is consistent and documented.
If you freelance or contract and get paid directly via 1099 — go with the 1099 loan. It's a faster qualification with less paperwork.
If you own a business in Chico and run expenses through a company account, bank statements likely show more qualifying income. Talk to us before you assume one path fits.
Some lenders allow blended documentation. It depends on the lender's guidelines and your income structure.
Rates vary by borrower profile and market conditions. Neither loan type is guaranteed to be cheaper than the other.
Both can be used for investment properties. Lender guidelines on property type and reserves will apply.
Most non-QM lenders want at least a 620. Stronger scores get better pricing on both loan types.
Expect a minimum of 10% down for most non-QM programs. Higher loan-to-value ratios typically require stronger credit.
Inconsistent 1099 income can hurt your qualifying average. A bank statement loan may work better in that case.