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in Avalon, CA
Self-employed borrowers in Avalon have two solid non-QM paths to financing. Both skip traditional W-2 verification, but they document income differently.
1099 loans work off your tax forms. Bank statement loans read your deposits. Your choice depends on how you file and what your accounts show.
1099 loans use your tax returns to verify income. Lenders look at your 1099 forms and calculate qualifying income from what you report to the IRS.
This works well if you claim most of your income and don't write off everything. You typically need two years of 1099 forms and a profit-and-loss statement.
Rates vary by borrower profile and market conditions. Credit requirements usually start at 620, though stronger profiles get better pricing.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits. Lenders calculate your average monthly income from what actually flows through your accounts.
This bypasses your tax returns entirely. If you write off significant business expenses, your bank statements may show higher qualifying income than your 1099 forms.
You need consistent deposits and enough reserves to cover several months of payments. Rates vary by borrower profile and market conditions, typically with minimum credit scores around 620.
The core split is tax returns versus bank accounts. 1099 loans favor borrowers who report higher income to the IRS. Bank statement loans favor those who maximize deductions.
Bank statement programs often allow higher loan amounts because they catch income that gets written off. But they typically require more reserves and stronger liquidity.
Both programs need documentation, just different kinds. Neither is easier to qualify for—they just read your finances through different lenses.
Choose 1099 loans if your tax returns reflect strong income and you don't heavily deduct expenses. This path is cleaner when your reported earnings match what you need to qualify.
Go with bank statement loans if you write off most business expenses but have consistent deposits. This works for contractors, consultants, and business owners with solid cash flow but lower taxable income.
Most Avalon self-employed buyers benefit from shopping both options. We calculate your qualifying income under each method and show you which gets you the better terms.
No, lenders use one income documentation method per loan. You pick the path that shows your income more favorably.
Neither program guarantees better pricing. Rates depend on your credit, down payment, and loan amount—both products price similarly.
Yes, most lenders want at least two years. Some bank statement programs accept 12 months if you have strong compensating factors.
Lenders average your deposits, but large swings hurt qualification. Consistent income works better for bank statement loans.
Yes, if your initial income calculation falls short. We'll rerun the numbers using bank statements if that path qualifies you for more.