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in El Monte, CA
Self-employed borrowers in El Monte face a choice: qualify with your 1099s or use bank statements. Both bypass traditional W-2 requirements, but the path you choose changes everything from approval odds to rate.
1099 loans verify income through tax forms filed by clients who paid you. Bank statement loans calculate income by reviewing deposits over 12-24 months. The right choice depends on how your business reports income and what your cash flow looks like.
1099 loans work for independent contractors who receive formal 1099 forms from clients. Lenders average your 1099 income over one or two years to determine qualifying income. If you write off heavy business expenses, this route often shows higher qualifying income than tax returns.
You'll need consistent 1099 documentation and typically a 620+ credit score. Down payments start at 10-15% for most programs. This option works best if you have organized records and clients who properly issue 1099 forms.
Bank statement loans calculate income by analyzing deposits in personal or business accounts. Lenders review 12 or 24 months of statements and apply a percentage (typically 50-75%) to account for business expenses. This works for anyone with consistent deposits, regardless of how clients pay you.
You need 12-24 months of bank statements showing regular deposits. Credit requirements match 1099 loans at 620+, but some lenders go lower. Down payments range from 10-20% depending on the lender and your deposit consistency.
The income calculation separates these programs. 1099 loans use the exact amounts on your forms with no expense deductions. Bank statement loans apply an expense factor (25-50%) against your deposits, which can lower qualifying income if you have slim margins.
Documentation differs sharply. 1099 loans need organized tax forms from every client who paid you. Bank statement loans just need your account statements. If clients pay you via Venmo, cash, or check without issuing 1099s, bank statements are your only option.
Rates typically favor 1099 loans by 0.25-0.50% because the income documentation is cleaner. But if your 1099 income is inconsistent or you lack forms for all income sources, bank statements may get you approved where 1099s won't.
Choose 1099 loans if you receive proper tax forms from most clients and want the cleanest approval. This works for consultants, contractors, and freelancers with established business relationships. You'll qualify for more home with 1099s if your business expenses are low.
Pick bank statement loans if clients pay you informally, you run multiple income streams, or your 1099 forms don't capture all earnings. This is the move for service businesses, gig workers with platform income, or anyone whose deposits exceed their documented 1099 income.
In El Monte's competitive market, getting pre-approved quickly matters. Bank statement loans process faster because you're not hunting down forms from dozens of clients. But if you have 1099s ready and want the best rate, that route saves money over 30 years.
Some lenders allow hybrid income documentation. This works if part of your income is documented via 1099s and part comes from other sources shown in bank deposits.
Both programs typically require 620+ credit. Bank statement loans sometimes go to 600 with larger down payments, but rate pricing gets expensive below 620.
You need at least one year of self-employment for 1099 loans. Bank statement loans sometimes approve with 12 months of consistent deposits even if you just went independent.
Both start around 10-15% down. Bank statement loans occasionally require 15-20% if your deposit history is inconsistent or you're using 12 months instead of 24.
Yes. If your 1099 income doesn't qualify you, we can run bank statements. Most brokers will test both scenarios to find the stronger approval path.