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in La Puente, CA
Both 1099 loans and bank statement loans serve self-employed borrowers in La Puente who can't qualify through traditional W-2 channels. The key difference is how you document income—tax returns versus bank deposits.
Most independent contractors choose based on how they structure their business deductions. Heavy write-offs favor bank statement programs. Clean 1099s with minimal expenses work better with 1099 loans.
1099 loans use your tax returns and 1099 forms to verify income—exactly like a traditional mortgage, but without the W-2 requirement. You'll need two years of 1099 income history and filed tax returns.
This works best for contractors who report most of their income without heavy business deductions. If your taxable income reflects what you actually earn, 1099 loans offer competitive rates and straightforward underwriting.
Bank statement loans calculate income directly from 12 to 24 months of business or personal bank deposits. Underwriters apply a percentage of your average monthly deposits—typically 50% for business accounts, 100% for personal accounts.
This route lets you qualify on actual cash flow instead of taxable income. Self-employed borrowers who write off vehicles, home office, travel, and equipment expenses usually show much higher income through bank statements than tax returns.
The income calculation creates the biggest gap between these programs. 1099 loans add up what your tax returns show after deductions. Bank statement loans multiply your average monthly deposits by a percentage factor.
Rate pricing also diverges. 1099 loans typically price closer to conventional mortgages—often 0.5% to 1% higher. Bank statement loans run 1% to 2% above conventional rates because they carry more underwriting risk. Credit score, down payment, and property type shift pricing in both directions.
Run the numbers both ways. Pull your last two years of 1099s and calculate total income after expenses. Then average your monthly bank deposits and multiply by 50% if using a business account. Whichever number is higher usually determines the better loan path.
La Puente contractors in construction, consulting, and creative fields often carry equipment depreciation and vehicle expenses that crush their taxable income. Those borrowers almost always qualify for larger loan amounts through bank statement programs despite the rate trade-off.
No. Lenders choose one income documentation method per loan. You'll apply under either a 1099 loan program or a bank statement program, not a hybrid of both.
Not necessarily. Both programs typically start at 10% to 15% down. Your credit score and debt-to-income ratio affect the down payment requirement more than the documentation type.
Cash withdrawals don't count as verifiable income on either program. You need documented deposits or reported 1099 income that underwriters can trace and verify.
Lenders require the most recent 12 or 24 consecutive months at closing. If you apply today, they'll pull statements through last month with no gaps allowed.
Yes, but it restarts underwriting. Most brokers analyze both options upfront so you apply under the stronger program from day one and avoid delays.