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in San Joaquin, CA
Both 1099 and bank statement loans exist because traditional underwriting doesn't work for self-employed borrowers. The difference is how lenders verify your income.
San Joaquin sees plenty of ag contractors, truckers, and service business owners who need these programs. Which one closes depends on how you run your books and what shows in your accounts.
1099 loans use your year-end 1099 forms to calculate income. Lenders look at gross receipts before business deductions eat into your qualifying power.
This works if you file 1099s that reflect strong revenue even when your tax returns show less. Most programs want 12-24 months of 1099 history and credit scores above 620.
You'll typically need 10-20% down depending on credit and cash reserves. Rates run 1-2% higher than conventional loans due to the non-QM structure.
Bank statement loans analyze deposits across 12-24 months of personal or business bank statements. Lenders calculate average monthly income and apply expense ratios based on your business type.
This program shines when your bank accounts show consistent deposits that don't appear on 1099s. Common for cash-heavy businesses or contractors who take payment multiple ways.
Expect 10-20% down with similar credit requirements as 1099 loans. Rates vary by borrower profile and market conditions but typically match other non-QM products.
The 1099 route requires formal contractor relationships that generate year-end tax forms. Bank statements work when income flows through accounts but doesn't all show up as 1099 income.
Bank statement loans give you more control since deposits matter more than how income is classified. But lenders apply expense percentages that can reduce your qualifying income by 25-50%.
Processing time runs similar for both, usually 21-30 days. The real difference shows up in which borrowers get stronger approvals based on their income documentation.
Choose 1099 loans if your gross receipts on tax forms look strong and you work as an independent contractor with clear paper trails. This path is cleaner when your 1099 income alone qualifies you.
Bank statement loans make sense when cash deposits, Venmo payments, or mixed income sources don't all generate 1099s. Also better if business write-offs crush your 1099 numbers but your accounts show healthy flow.
Some borrowers qualify for both and shop rates between them. We run the math both ways because a 5% difference in expense ratio assumptions can shift your approval by $50K-100K in loan amount.
No, lenders pick one income calculation method per loan. We choose whichever documentation gives you the stronger approval amount.
You'll provide returns but lenders don't use them for income calculation. They verify you're filing and check for tax liens or issues.
Rates run similar across both programs. Your credit score and down payment matter more than which documentation method you use.
Most lenders want 12-24 months of history. Two years of documentation gives you more loan options and sometimes better pricing.
Lenders average deposits over the statement period. Seasonal businesses can still qualify but may need larger reserves to offset income fluctuation.