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in Culver City, CA
Both options serve self-employed borrowers who can't use tax returns. The difference is how you prove income.
1099 loans work for contractors with clean books. Bank statement loans work when your deposits tell a better story than your 1099s.
Culver City has tech freelancers, creatives, and business owners who fall into both camps. Your documentation style determines which loan makes sense.
1099 loans use your 1099 forms to verify income. Lenders calculate qualifying income from what you actually received.
You need two years of 1099s from the same clients or industry. Most lenders want 620+ credit and 15-20% down.
This works if your 1099 income is stable and you don't write off heavy expenses. Rates typically run 1-2% above conventional.
Bank statement loans use 12-24 months of personal or business bank deposits. Lenders apply an expense factor, usually 25-50%.
You skip tax returns entirely. The underwriter looks at deposit patterns and calculates income from what flows through your accounts.
Minimum 10% down on most programs, 15% gets better pricing. Credit requirements start at 600-620 depending on the lender.
1099 loans count what clients paid you. Bank statement loans count what hit your account after business expenses.
If you write off 40% of revenue on taxes, bank statements usually show higher qualifying income. The expense factor beats your tax deductions.
1099 loans require income source consistency. Bank statement loans care more about deposit consistency, regardless of where it came from.
Rates are similar on both. Your credit score and down payment matter more than which documentation route you take.
Use 1099 loans if your forms show strong income and you invoice clients directly. Clean contractor income qualifies easily.
Use bank statement loans if you run expenses through your business or mix revenue streams. Also works when 1099s don't tell the full story.
Most Culver City freelancers in tech and media have complex income. Multiple clients, project-based work, and business expenses make bank statements the cleaner path.
Some borrowers qualify under both. We run scenarios for each and compare approval amounts before you choose.
No, you pick one income documentation method. Some lenders blend W-2 and 1099, but you can't combine 1099 with bank statements on a single application.
Bank statements usually qualify self-employed borrowers for more if you write off significant expenses. The expense factor beats tax deductions in most cases.
Most lenders want two years self-employed for either option. Some bank statement programs accept one year if deposits are strong and consistent.
Rates are similar. Both are non-QM products priced 1-2% above conventional, varying by borrower profile and market conditions.
Lenders average the two years or use the lower year. Bank statements might work better since they show current deposit patterns, not historical tax filings.