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in Calexico, CA
Self-employed borrowers in Calexico face a common challenge: traditional lenders want W-2s you don't have. Both 1099 loans and bank statement loans solve this problem, but they verify your income differently.
The right choice depends on how you receive income and what documentation you keep. Understanding these differences helps you move forward with confidence in Imperial County's competitive market.
1099 loans use your IRS 1099 forms to prove income. If you receive 1099-MISC or 1099-NEC forms from clients, lenders review these documents plus your tax returns to calculate qualifying income.
This option works well for independent contractors with consistent client relationships. You'll typically need two years of 1099 income from the same line of work, showing stable or growing earnings.
Rates vary by borrower profile and market conditions. Many Calexico professionals—from agricultural consultants to cross-border business owners—find 1099 loans straightforward because their client payments are already documented.
Bank statement loans analyze deposits in your business or personal accounts over 12 to 24 months. Lenders calculate your average monthly income by reviewing actual cash flow rather than tax forms.
This approach benefits business owners who write off significant expenses. The lender sees your gross deposits before deductions, which often results in higher qualifying income than what appears on your tax return.
You'll submit consecutive months of statements with no gaps. Rates vary by borrower profile and market conditions. This flexibility makes bank statement loans popular with Calexico entrepreneurs who maximize tax deductions.
The main split is documentation type. 1099 loans require specific tax forms from clients, while bank statement loans need only your actual bank records showing deposits.
Income calculation differs significantly. With 1099 loans, lenders use the income reported on your forms and returns. Bank statement loans calculate income from total deposits, often giving business owners higher qualifying amounts.
Down payment and rate requirements can vary between these programs. Bank statement loans sometimes require slightly larger down payments because they're based on stated cash flow rather than IRS-documented income.
Choose 1099 loans if you work as an independent contractor receiving official 1099 forms and your tax returns reflect your true income. This path offers simpler documentation when your earnings aren't reduced by business expenses.
Bank statement loans make sense when you own a business with significant write-offs, receive payments through multiple channels, or want lenders to see your gross income. This option gives you flexibility if your tax returns show lower income than your actual cash flow.
Many Calexico borrowers benefit from exploring both options with a local mortgage broker. Your specific income structure, documentation availability, and financial goals determine which program delivers better terms.
Some lenders allow hybrid approaches, but typically you'll choose one documentation method. A mortgage broker can evaluate which single path gives you the strongest application.
No. Lenders expect normal business fluctuations and personal expenses. They focus on average deposits over 12-24 months, not individual transactions.
Rates vary by borrower profile and market conditions. Your credit score, down payment, and documentation quality affect pricing more than the specific loan type.
Most programs require two years of 1099 income history. You'll provide the actual forms plus corresponding tax returns for both years.
Lenders typically require consecutive months without gaps. Missing statements can delay approval, so gather complete records before applying.