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in Kingsburg, CA
Most Kingsburg self-employed borrowers think they need perfect 1099s to qualify. That's wrong. Bank statement loans often work better for contractors and small business owners who write off most of their income.
Both programs ignore tax returns that show artificially low income. The difference comes down to how you document what you actually make and which paper trail is cleaner.
1099 loans use your 1099 forms to prove income. Lenders average your gross receipts from the past two years. No need to show adjusted gross income from tax returns.
You'll need consistent 1099 income from the same sources. One-off gigs don't help. Lenders want to see that your clients keep paying you year after year.
Most programs require 10-20% down and credit scores around 640. Rates run 1-2% higher than conventional loans because of the risk premium.
Bank statement loans pull income from 12-24 months of business or personal deposits. Lenders calculate a monthly average and apply it. This works great when your 1099s are messy or incomplete.
You can use personal statements if business income runs through your checking account. Business statements work too. Some borrowers mix both to show maximum income.
Expect 15-20% down minimums and 660+ credit scores. Rates vary by borrower profile and market conditions but typically land 1.5-2.5% above conforming rates.
1099 loans need clean contractor relationships with formal income reporting. Bank statement loans don't care about 1099s at all. If half your income comes through Venmo or cash deposits, bank statements capture it.
Credit and down payment requirements differ slightly. Bank statement loans want higher credit scores and more money down. The trade-off is flexibility in how you prove income.
Processing time matters in Kingsburg's agricultural economy where business cycles are seasonal. 1099 loans close faster because the documentation is simpler. Bank statement loans take longer due to detailed deposit analysis.
Choose 1099 loans if you have two years of steady contractor income from the same clients. This works for consultants, IT contractors, and licensed professionals with clean documentation.
Pick bank statement loans if your income is lumpy, comes from multiple sources, or includes cash deposits. Fresno County farmers, restaurant owners, and retail operators fit this profile.
Some Kingsburg borrowers qualify for both. In that case, 1099 loans usually offer slightly better rates and faster closing. But if your bank statements show 30% more income than your 1099s, that higher qualification amount can offset the rate difference.
No. Lenders pick one income calculation method per loan. You choose the approach that shows higher qualifying income.
Yes. Both handle purchase and rate-term refinance transactions. Cash-out refinances are available but require 20-25% equity.
1099 loans typically price 0.25-0.5% lower than bank statement loans. Rates vary by borrower profile and market conditions.
Bank statement loans sometimes work with 12 months of deposits. 1099 loans almost always need two full years of history.
Lenders average the two years for 1099 loans. Bank statements let you use the most recent 12 months if that shows higher income.