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in Lemoore, CA
Both 1099 and bank statement loans serve self-employed borrowers in Lemoore, but they pull income proof from different sources. The right choice depends on how you structure your business income and what documentation you can provide.
We place self-employed buyers into both programs regularly in Kings County. Most borrowers qualify better with one option over the other based on their tax strategy and cash flow patterns.
1099 loans use your 1099 forms to prove income — typically one or two years of forms from clients. Lenders calculate your qualifying income from the gross receipts on those forms, often applying an expense ratio rather than requiring full tax returns.
This works well if you receive clear 1099-MISC or 1099-NEC forms and your actual income matches what those forms show. You avoid the hassle of explaining deductions or complex business structures to underwriters.
Most lenders want 12-24 months of 1099 history and credit scores around 620-640 minimum. Rates vary by borrower profile and market conditions, but expect pricing similar to other non-QM programs.
Bank statement loans pull income directly from 12 or 24 months of personal or business bank deposits. Underwriters analyze your average monthly deposits and apply an expense factor to calculate qualifying income.
This option shines when you write off significant expenses or run income through an LLC or S-corp. Your bank deposits show the actual cash flow even if your tax returns look lean after deductions.
You need consistent deposits over the statement period and credit scores typically starting at 620. Some lenders accept personal statements only, while others prefer business accounts for cleaner income tracking.
The main split: 1099 loans need clean contractor income on paper, while bank statement loans look at actual deposits. If you take every legal deduction and your tax returns show minimal net income, bank statements usually qualify you for more.
Documentation burden differs too. Bank statements require uploading months of account activity and explaining large or irregular deposits. 1099 loans just need the forms and maybe a CPA letter confirming your business status.
Pricing runs similar on both, but bank statement loans sometimes cost slightly more due to the manual underwriting involved. Either way, you pay a premium over conventional rates because these are non-QM products.
Choose 1099 loans if you receive clear 1099 forms from clients and your income is stable year-over-year. This route closes faster because underwriters review simple forms rather than months of transactions.
Go with bank statement loans if you run expenses through your business, operate as an LLC or S-corp, or if your tax returns show much less income than you actually earn. The extra documentation work pays off in higher loan amounts.
For Lemoore buyers juggling both income types, we often test both calculations upfront. One method almost always qualifies you better based on your specific tax and business structure.
Some lenders allow blended income calculations, but most programs require picking one method. We test both to see which qualifies you for more house.
Most lenders want 12-24 months of history in your current business. Shorter histories sometimes work with larger down payments or higher credit scores.
Rates vary by borrower profile and market conditions, but pricing runs similar. Bank statement loans occasionally cost 0.125-0.25% more due to manual underwriting.
Underwriters back out transfers between your own accounts, loans, or one-time windfalls. Only recurring business income counts toward qualification.
Yes, borrowers refinance between non-QM products all the time. You might switch methods as your business structure or tax strategy changes.