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in Bell Gardens, CA
Most self-employed borrowers in Bell Gardens hit the same wall: traditional lenders want W-2s you don't have. Both 1099 and bank statement loans solve that problem, but they verify your income differently.
The right choice depends on how you run your business and what shows up on your tax returns. One uses your 1099 forms directly, the other ignores them completely and looks at bank deposits instead.
1099 loans use your 1099 forms to prove income. Lenders typically average your last two years of 1099 income to calculate what you can borrow.
This works best if you claim most of your income and don't write off much. If your tax returns show strong earnings after deductions, this path is straightforward.
You'll need clean 1099 documentation from clients and tax returns that match. Most lenders want 24 months of history, though some accept 12 months for established contractors.
Bank statement loans skip tax returns entirely. Lenders review 12 to 24 months of business or personal bank statements and calculate income from deposits.
This program works for borrowers who write off significant expenses. If your tax returns show low net income but your bank account tells a different story, this is your path.
Underwriters look at deposit patterns to verify consistent income. They filter out transfers and non-income deposits, then calculate a monthly average.
The core difference is what counts as income. 1099 loans use taxable income from your returns. Bank statement loans use gross deposits before any deductions.
Bank statement loans typically carry slightly higher rates because lenders take more risk without tax verification. Expect rates 0.25% to 0.75% higher than 1099 programs.
Documentation differs significantly. 1099 loans need organized tax returns and matching 1099 forms. Bank statement loans need complete statements with no missing months and clear deposit patterns.
Choose 1099 loans if your tax returns already show strong income. This path offers better rates and works when you don't maximize business deductions.
Pick bank statement loans if you write off most earnings for tax purposes. Your CPA saves you money on taxes, and this program saves your home purchase.
Many Bell Gardens self-employed borrowers earning through gig work, contracting, or small business operations fit one of these categories. Run the numbers both ways before deciding.
Yes, many borrowers qualify under both programs. We compare your approval amount and rate under each option to find the better deal.
Not necessarily. 1099 loans just need documented contractor income. Bank statement loans work with or without formal business registration.
1099 loans typically close quicker because documentation is simpler. Bank statement loans need more underwriting time to verify deposit patterns.
Yes for bank statement loans. Lenders accept personal statements if that's where business income deposits. 1099 loans don't require bank statements at all.
Both programs typically need 620 minimum, though some lenders go to 600. Higher scores above 680 unlock better rates on either option.