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in Azusa, CA
Both programs serve self-employed borrowers in Azusa, but they verify income differently. Your choice depends on how clean your 1099s look versus what your bank deposits show.
Most self-employed buyers pick the option that shows higher qualifying income. We run both scenarios to find which gets you approved for more house.
1099 loans use your tax forms to calculate income. Lenders average two years of 1099 income, then subtract business expenses you claimed.
This works well if you don't write off much. But heavy write-offs tank your qualifying income since lenders subtract what you deducted.
You need two years of 1099s from the same industry. Credit requirements start at 620, with 15-20% down typical for Azusa properties.
Bank statement loans calculate income from deposits. Lenders review 12-24 months of business or personal bank statements and average monthly deposits.
They subtract business expenses using standard percentages, not your actual write-offs. This usually shows higher income than 1099s for aggressive tax filers.
You need consistent deposits in your statements. Credit starts at 620-640, down payments run 15-20% for most Azusa deals.
The income calculation splits them. 1099 loans use your actual tax deductions, which penalizes smart tax planning. Bank statement loans use fixed expense ratios of 25-50%, ignoring what you actually wrote off.
Documentation requirements differ too. 1099 loans need clean tax returns and consistent income sources. Bank statements just need regular deposits without NSFs or unexplained transfers.
Rates vary by borrower profile and market conditions. Bank statement loans typically price 0.25-0.50% higher because lenders view deposit-based income as less verified than IRS documents.
Choose 1099 loans if you file conservative tax returns with minimal deductions. Your tax documents already show strong income, so proving it is straightforward.
Pick bank statement loans if you maximize write-offs for tax savings. The standard expense calculation recovers income you sheltered, often adding 30-40% to your qualifying amount.
We analyze both options during your application. Most Azusa self-employed buyers qualify for more house using bank statements, but 1099 loans close faster with cleaner documentation.
No, you pick one income documentation method. We run scenarios with both to see which qualifies you for a larger loan amount.
Usually yes, but not always. If you claim few deductions or have irregular deposits, 1099s might show stronger income.
1099 loans close quicker since tax returns are simpler to verify. Bank statements need detailed deposit analysis which adds 3-5 days.
Neither program works with under two years self-employed. You need 24 months in your current business for both options.
No, both typically require 15-20% down in Azusa. Credit score and loan amount affect the exact requirement more than documentation type.