Loading
in Alhambra, CA
Both loan types serve self-employed borrowers in Alhambra who can't use W-2s. The difference comes down to how you document income and what your tax returns show.
1099 loans work if you report strong taxable income. Bank statement loans shine when your write-offs shrink your tax liability but cash flow stays solid.
1099 loans use your tax returns to verify income. Underwriters review your 1099 forms and calculate qualifying income from what you reported to the IRS.
This option works best for contractors who keep business expenses lean. You need two years of 1099 income history and strong tax returns that reflect healthy earnings.
Rates typically match conventional loans when your credit clears 680. Most lenders want 15-20% down and debt-to-income below 43%.
Bank statement loans skip tax returns entirely. Lenders analyze 12 to 24 months of business or personal bank deposits to calculate your monthly income.
Underwriters apply an expense ratio to your deposits, usually 25-50% depending on business type. The remaining amount becomes your qualifying income.
This route saves deals when legitimate write-offs tank your taxable income. Most programs want 10-20% down and accept credit scores as low as 620.
The documentation split matters most. 1099 loans require clean tax returns showing income you actually reported. Bank statement loans only care about cash flowing through your accounts.
Rate differences show up at approval. 1099 loans often price closer to conventional rates. Bank statement loans carry higher rates, typically 1-2% above conforming programs.
Down payment flexibility varies by lender. Bank statement loans sometimes allow 10% down on purchases. Most 1099 programs want 15-20% minimum in Alhambra.
Choose 1099 loans if your tax returns look strong and you report most of your income. You'll get better rates and terms when your Schedule C or 1099 forms support the loan amount you need.
Pick bank statement loans when legitimate expenses crater your taxable income. This works for contractors, consultants, and business owners who maximize deductions but maintain solid cash flow.
Many Alhambra self-employed buyers benefit from shopping both options. We run scenarios through multiple programs to find which documentation method delivers better approval odds and terms.
No, lenders choose one income calculation method per loan. You can't cherry-pick documentation to maximize qualifying income across both approaches.
1099 loans typically close in 21-30 days since underwriting matches conventional timelines. Bank statement loans take 25-35 days due to deposit analysis requirements.
Yes, both programs fund rental properties in Alhambra. Expect higher rates and 20-25% down payment minimums on non-owner occupied purchases.
Both work for rate-term and cash-out refinances. Bank statement loans allow higher cash-out amounts when your deposits support the new loan amount.
Underwriters average two years of income. Sharp drops trigger decline unless you document why income increased recently and will stay stable.