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in Reedley, CA
Reedley's self-employed borrowers face a choice between two non-QM options. Both skip W-2s, but they verify income differently.
1099 loans use tax forms. Bank statement loans use deposits. The right pick depends on how you report income and what your deposits show.
1099 loans qualify you based on 1099 forms from clients. Lenders average 12-24 months of 1099 income to calculate what you can borrow.
This works best if you report most of your income to the IRS. Expect 10-20% down and rates 0.5-1.5% above conventional. Credit scores typically need to hit 620 minimum.
Bank statement loans use 12-24 months of business or personal deposits. Lenders calculate income by analyzing what hits your account, not what you report to the IRS.
Perfect for borrowers who write off most income. Rates run 1-2% above conventional. Down payments range 10-20%, depending on deposit consistency and credit profile.
The core split: 1099 loans care about reported income, bank statement loans care about deposits. If you write off 40% of revenue, bank statements show higher qualifying income.
Rates vary by borrower profile and market conditions. Bank statement loans cost more because lenders assume higher risk when bypassing tax returns. Approval speed is similar—both take 3-4 weeks.
Choose 1099 if you report most income and want lower rates. Choose bank statements if write-offs crush your taxable income but deposits stay strong.
Reedley borrowers with seasonal ag income often prefer bank statements—they smooth out harvest spikes better than yearly 1099s. Talk to a broker who can run both scenarios and compare approval amounts.
Some lenders allow blended qualification using both. This works if 1099s cover part of income and deposits show additional revenue not on tax forms.
Both take 3-4 weeks. Speed depends more on underwriter workload than program type. Clean documentation matters more than loan choice.
1099 loans always need returns. Bank statement programs often skip them entirely—lenders just verify deposits and business ownership.
1099 loans run 0.5-1% cheaper. Bank statements cost more because they bypass IRS verification and accept higher stated income.
Rarely. Both programs want 12-24 months of history. Some lenders accept 12 months if you worked in the same industry as a W-2 employee before.