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in Calabasas, CA
Self-employed borrowers in Calabasas have two strong non-QM options that skip traditional W-2 verification. Both 1099 and bank statement loans serve independent contractors, but they work differently and fit different income profiles.
If you're a consultant, realtor, or business owner here, understanding which documentation path matches your finances saves time and avoids denial. Most self-employed borrowers qualify better with one over the other—not both equally.
1099 loans use your 1099 forms from the past two years to verify income. Lenders calculate your qualifying income by averaging what you reported across those forms, sometimes allowing deductions back in.
This path works best if you receive consistent 1099s from multiple clients or platforms. You need those forms to exist—if you're paid via wire transfers, checks, or direct deposits without 1099s, this won't work.
Credit typically needs to be 620 or higher. Down payments start at 10% but expect 15-20% for better rates. Rates run 1-2% above conventional because of the non-QM structure.
Bank statement loans analyze 12 or 24 months of business or personal bank deposits to calculate your income. Lenders apply a percentage factor to your total deposits—typically 50-75% depending on business expenses.
This path works for business owners who reinvest profits, take distributions, or get paid in ways that don't generate 1099s. If your tax returns show low income but your accounts show healthy cash flow, bank statements tell the real story.
Credit standards sit around 620-640 minimum. Down payments typically start at 15% and often require 20% for competitive pricing. Expect rates similar to or slightly higher than 1099 loans.
The core difference is documentation type. 1099 loans need tax forms you already filed. Bank statement loans need consistent deposit history but don't care about 1099s or tax returns.
Income calculation varies significantly. 1099 loans average your reported income across forms. Bank statement loans apply a percentage to deposits—so $20k monthly deposits might qualify as $10k-$15k income depending on the factor.
Bank statement loans handle irregular income better. If you had three big months and nine slow months, averaging deposits works better than showing inconsistent 1099 amounts. But if your 1099s are clean and steady, that path closes faster.
Choose 1099 loans if you receive clear, consistent 1099 income from clients or platforms and your tax returns reflect your actual earning power. Realtors, consultants, and gig workers with documented contractor income fit here.
Choose bank statement loans if you own a business with expenses that reduce taxable income, receive payments that don't generate 1099s, or have strong cash flow that tax returns don't capture. Many Calabasas business owners—especially those with LLCs or S-corps—qualify better this way.
When in doubt, pull your last two years of 1099s and 12 months of bank statements. We'll run both scenarios and show you which delivers better terms. Most borrowers don't qualify equally under both—one almost always wins.
No. Lenders structure these as separate programs with different underwriting. You pick one documentation path and stick with it through closing.
Rates are comparable—usually within 0.25% of each other. Your credit score and down payment affect pricing more than which program you choose.
Yes for both programs. Lenders want to see consistent self-employment income over 24 months before they'll approve either loan type.
Declining income hurts both options. Bank statement loans handle this slightly better since they can weight recent months more heavily than older deposits.
Bank statement loans work better here. They calculate income from deposits before expenses, while 1099 loans use what you reported on tax forms after deductions.