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in Sanger, CA
Self-employed borrowers in Sanger face a common problem: most lenders only understand W-2 income. If you're a contractor, consultant, or business owner with 1099s or business accounts, you need a loan that qualifies you based on actual cash flow.
Both 1099 loans and bank statement loans solve this problem, but they verify income differently. One uses your filed tax forms. The other uses deposits in your business or personal accounts.
The right choice depends on how you document income and what your tax returns show. Most brokers in Fresno County see these loans work for different types of self-employed borrowers.
1099 loans qualify you using the income reported on your 1099 forms. Underwriters review your tax returns to confirm what you earned as an independent contractor or freelancer.
This works well if you claim most of your income and don't write off everything. Lenders typically average your 1099 income over two years to calculate qualifying income.
You'll need at least two years of 1099 history in the same field. Credit scores start around 620, and down payments run 10% to 20% depending on the lender.
Bank statement loans skip tax returns entirely. Instead, lenders analyze 12 to 24 months of bank deposits to calculate your income.
This matters for business owners who reinvest profits or write off legitimate expenses. The underwriter looks at actual cash flow, not taxable income on your return.
Most lenders want personal or business bank statements with consistent deposits. You'll need 10% to 20% down and credit scores around 620 to 640 for approval.
The main split is documentation. 1099 loans require filed tax returns that show your contractor income clearly. Bank statement loans ignore returns and focus on what actually hit your accounts.
Rates vary by borrower profile and market conditions, but bank statement loans often price slightly higher because they carry more underwriting risk. Both programs charge more than conventional loans.
Processing speed differs too. 1099 loans move faster if your tax returns are clean and complete. Bank statement loans take longer because underwriters manually review every deposit to separate business income from transfers or loans.
Choose a 1099 loan if you claim most of your income and your tax returns reflect what you actually earn. This works for consultants, real estate agents, and contractors who don't maximize deductions.
Go with bank statement if your tax returns show low income due to business write-offs. You'll pay slightly higher rates, but you'll qualify based on real cash flow instead of Schedule C net income.
Most self-employed borrowers in Sanger fall into one camp or the other. The determining factor is whether your tax returns help or hurt your qualifying income.
No. Lenders use one method or the other, not both. You'll pick the approach that shows higher qualifying income based on your documentation.
Sometimes. Many lenders start at 10% down, same as conventional. But some bank statement programs want 15-20% to offset underwriting risk.
1099 loans typically price lower because tax returns provide clearer income verification. Bank statement loans add 0.25-0.50% in most cases.
1099 loans close in 25-35 days with complete returns. Bank statement loans take 30-45 days due to manual deposit review by underwriters.
No. These are non-QM products available through wholesale lenders nationwide. A broker with access to multiple lenders finds better pricing.