Loading
in El Segundo, CA
Self-employed borrowers in El Segundo face a choice between two non-QM paths. Both skip traditional income verification, but they work differently and fit different tax situations.
1099 loans use your earnings statements to calculate income. Bank statement loans pull income directly from deposits. Your write-off strategy determines which option costs less.
1099 loans qualify you based on your actual 1099 forms from clients. Lenders total your 1099 income and apply minimal deductions—usually just business expenses you can't avoid.
This option works best if you don't write off much against your 1099 income. Consultants, contractors, and gig workers with straightforward expenses often see higher qualifying income this route.
You'll need 12-24 months of 1099s from the same line of work. Credit minimums start around 640, and most lenders want 10-20% down depending on your profile.
Bank statement loans calculate income from deposits in your business or personal accounts. Lenders review 12 or 24 months of statements and apply a standard expense ratio—often 25-50% depending on your business type.
This path works when you maximize tax deductions and your 1099s look small after write-offs. Real estate agents, restaurant owners, and contractors with equipment costs often qualify for more this way.
Expect to provide 12-24 months of bank statements showing consistent deposits. Credit minimums hover around 620-640, with 10-20% down for most deals. Rates vary by borrower profile and market conditions.
The core split is documentation. 1099 loans need your actual earnings statements. Bank statement loans need account history showing deposits. One pulls from what you report to clients, the other from what hits your account.
Qualifying income changes dramatically between them. If you write off $80k against $150k in 1099 income, bank statements might show the full $150k in deposits. That difference can mean $200k more buying power in El Segundo's aerospace corridor.
Approval odds shift based on income consistency. 1099 loans favor steady contract work with the same clients. Bank statements handle lumpy income better—big deposits followed by quiet months don't kill your file.
Choose 1099 loans if you file clean returns with minimal deductions. If your Schedule C looks close to your gross 1099 income, this path qualifies you faster with less paperwork.
Go with bank statements if you write off aggressively for tax savings. When your taxable income sits $50k below your actual cash flow, bank statements recover that buying power. Just be ready to explain large one-time deposits.
Run both scenarios before picking. I've seen El Segundo borrowers qualify $150k higher on bank statements despite identical income sources. We compare both when shopping your file across lenders.
No. Lenders pick one income calculation method per file. You can't cherry-pick the best parts of each. We run both scenarios to see which qualifies you higher before submitting.
Rates price similarly for both loan types. Your credit, down payment, and property value matter more than documentation method. Rates vary by borrower profile and market conditions.
No. Personal accounts work if they show your business deposits clearly. Mixing personal and business funds in one account is common and acceptable for these loans.
Most lenders want 12-24 months of 1099s from the same industry. One year works if you've been in that line of work longer and can show prior history.
Yes, but it restarts underwriting. If your initial income calculation falls short, we can pivot to the other method. Just expect delays while the new docs get reviewed.
1099 loans typically close 3-5 days quicker. Fewer statements to review means faster underwriting. Bank statement loans take longer because of deposit analysis and sourcing questions.