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in Claremont, CA
Self-employed borrowers in Claremont face a choice: qualify using 1099 forms or bank statements. Your tax write-offs determine which path makes sense.
Both are Non-QM loans built for business owners who can't show traditional paystubs. The difference is how lenders calculate your income and what documentation they need.
1099 loans use your actual tax filings to prove income. Lenders review your 1099 forms plus personal and business returns from the past two years.
This works if your net income after write-offs still qualifies you. Most lenders want 620+ credit and 15-20% down. Rates typically run 1-2% higher than conventional.
The math is straightforward: they calculate your qualifying income from what you reported to the IRS. No surprising adjustments or interpretations.
Bank statement loans bypass tax returns entirely. Lenders review 12 or 24 months of business or personal bank deposits to calculate your monthly income.
They apply a percentage to your deposits—usually 50-75%—to account for business expenses. This helps borrowers who write off most income legally but still have strong cash flow.
Credit requirements match 1099 loans at 620+. Down payments start at 10-20%. Rates run similar or slightly higher depending on deposit consistency.
The core split is taxable income versus cash flow. 1099 loans reward borrowers who show profit on tax returns. Bank statement loans help those who minimize taxable income through deductions.
Documentation differs completely. 1099 loans need IRS forms and complete returns. Bank statements just need consecutive monthly statements—no Schedule Cs or P&Ls required.
Rates vary by borrower profile and market conditions. Both typically cost more than conventional loans. Bank statement pricing can edge higher due to added underwriting complexity.
Pick 1099 loans if your tax returns already show enough net income to qualify. This path is simpler when your write-offs don't tank your qualifying income.
Choose bank statement loans if aggressive deductions help your tax bill but hurt your mortgage application. This works for contractors, consultants, and business owners with healthy revenue but minimal reported profit.
Run the numbers with both methods before applying. Some borrowers qualify higher with bank statements. Others save money on rate by using 1099s. Your CPA and broker should compare options together.
Yes. If your 1099 income doesn't qualify you, we can resubmit using bank statements instead. The credit pull stays valid for both applications.
Both work throughout Los Angeles County including Claremont. Property type matters more than location—single-family homes get the best terms with either option.
Rates are usually similar. 1099 loans sometimes price slightly better because tax returns provide clearer income verification than deposit analysis.
Most lenders require one method or the other. Mixing documentation types complicates underwriting and most programs don't allow it.
1099 loans need two years of forms and tax returns. Bank statement loans require 12 or 24 consecutive months depending on the lender's program.