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in Hidden Hills, CA
Hidden Hills buyers with non-traditional income face two main paths: 1099 loans and bank statement loans. Both skip W-2s, but they verify income differently.
Your choice depends on how you structure income and what's in your business accounts. Most self-employed borrowers qualify for one but not both.
1099 loans use your 1099 forms to prove income. Lenders review one or two years of forms to calculate what you can afford.
This works well if you receive clean 1099 income without heavy business expenses. Contractors and consultants with straightforward setups benefit most.
The underwriter looks at gross 1099 income, not what's left after write-offs. That typically means higher qualifying income than tax returns show.
Bank statement loans analyze 12 or 24 months of business deposits. Lenders calculate your average monthly income from deposits, not 1099s.
This program fits borrowers who run expenses through their accounts or mix income sources. Real estate agents, business owners, and freelancers with variable revenue use these.
You'll need personal or business bank statements showing consistent deposits. Lenders apply a percentage factor to deposits to account for business costs.
1099 loans require actual 1099 forms from clients. Bank statement loans don't need them—just deposit records.
Income calculation differs sharply. 1099 programs use gross receipts. Bank statement loans apply percentage factors to deposits, usually 50-100% depending on business type.
Documentation is lighter with 1099 loans if you have the forms. Bank statements require sorting through months of transactions and explaining large deposits.
Choose 1099 loans if you receive clear contractor income with low overhead. You'll qualify faster with less paperwork.
Go with bank statements if you write off heavy expenses, mix income types, or don't get 1099 forms. These programs capture income that tax returns miss.
In Hidden Hills, where properties demand higher loan amounts, maximizing your qualifying income matters. Run both scenarios to see which calculation works better.
No, you pick one income documentation method. Some lenders let you combine income sources, but you still choose either 1099 or bank statement verification.
Rates run similar on both—typically 1-2% above conventional. Your credit score and down payment matter more than which non-QM program you choose.
You need 1099s covering the income you're claiming. If you use 12 months of income, provide 1099s for that period showing sufficient earnings.
Most programs require 12 or 24 months. Longer periods smooth out income fluctuations and can help you qualify for more.
Lenders average deposits over the statement period. Large one-time deposits usually get excluded, so consistent monthly income works best.