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in Compton, CA
Both programs serve self-employed borrowers in Compton who can't verify income with W-2s. The difference is what you use to prove you earn enough to qualify.
1099 loans rely on tax forms from your clients. Bank statement loans use deposits flowing through your accounts. Your business structure and how you manage income determines which path works.
1099 loans use forms from your clients as income proof. Lenders add up what you earned across all 1099s, then apply a percentage to determine qualifying income.
You'll need at least one year of 1099 forms, though two years strengthens your case. This works if you're organized with tax filing and receive clear documentation from clients.
Bank statement loans analyze 12 or 24 months of business or personal account deposits. Underwriters calculate average monthly income from your statements, applying expense ratios based on your business type.
This program works even if your 1099s don't reflect actual earnings. Many Compton self-employed borrowers write off substantial expenses, making their tax returns look weaker than their cash flow.
1099 loans require clean tax documentation from multiple clients. Bank statement programs don't care what your tax return says—they follow actual deposits.
Bank statement loans typically cost more. Expect rates 0.5-1.5% higher than conventional, with slightly higher costs than 1099 programs. But if your 1099s are messy or you maximize deductions, the bank statement route may be your only option.
Choose 1099 loans if you receive clear forms from clients and file taxes showing healthy income. This route costs less and underwriting moves faster.
Go with bank statements if you write off heavy expenses, work with cash clients, or operate multiple LLCs. Yes, you'll pay more in rate, but you'll actually qualify when 1099 documentation won't support the loan amount you need.
Some lenders allow it, but most programs require you to pick one documentation method. Mixing both complicates underwriting without improving your qualifying income.
1099 loans typically close in 21-30 days. Bank statement loans take 30-45 days since underwriters manually review every deposit across multiple months.
Most non-QM lenders want at least two years in the same business or industry. Some accept one year if income is strong and stable.
Yes. Both programs work for 2-4 unit properties in Compton. Lenders will count a percentage of projected rental income toward qualification.
Underwriters average deposits over 12 or 24 months, smoothing out seasonal fluctuations. Consistent overall trends matter more than month-to-month variation.