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in Long Beach, CA
Long Beach self-employed borrowers have two strong non-QM paths to financing. Both work around traditional W-2 documentation, but they verify income differently.
1099 loans use your tax forms as proof of earnings. Bank statement loans calculate income from 12-24 months of deposits.
The right choice depends on how you run your business and what shows up on paper. Most Long Beach freelancers and contractors fit one approach better than the other.
1099 loans qualify you based on the income reported on your 1099 forms and tax returns. Lenders typically average your last two years of net income after business expenses.
This works well if you claim modest deductions and your taxable income reflects what you actually earn. Rates vary by borrower profile and market conditions.
Credit score minimums usually start at 620, though 680+ gets better pricing. Most lenders want 10-20% down for primary residences in Long Beach.
Bank statement loans skip tax returns entirely. Lenders review 12 or 24 months of personal or business bank deposits to calculate your income.
They apply an expense factor—typically 25-50% depending on your business type—to estimate net earnings. This route works when your deposits show strong cash flow but your tax returns don't.
Credit minimums run similar to 1099 loans, starting around 620. Down payment requirements typically range from 10-25% based on credit strength and cash reserves.
The core split comes down to write-offs. If you take heavy business deductions that reduce taxable income, bank statements show the real money flowing through your accounts.
1099 loans favor contractors who keep write-offs conservative. Your tax return becomes your strongest asset because it shows healthy net income.
Interest rates on bank statement loans typically run 0.5-1% higher due to added documentation complexity. Both loan types offer 30-year fixed and adjustable options.
Bank statement loans accept more diverse income sources—Venmo, PayPal, cash deposits—as long as they're documented. 1099 loans stick to reported contract income only.
Pull your last two years of tax returns. If your net income after deductions supports the Long Beach mortgage you want, go with a 1099 loan for better pricing.
If your returns show $60K net but you actually cleared $120K with aggressive expense claims, bank statements tell the real story. You'll pay slightly more in rate but actually qualify.
Long Beach gig workers mixing W-2 and 1099 income can use either path. We compare both across our lender network to find which delivers better terms for your specific tax situation.
No. Lenders pick one income verification method per loan. We help you choose which tells the better story for your approval.
Personal accounts work fine if your business deposits flow through them. Business accounts can strengthen the file but aren't mandatory.
They total your deposits and subtract 25-50% for estimated expenses. The percentage depends on your industry and business structure.
1099 loans typically close 3-5 days quicker. Bank statement underwriting adds time for deposit analysis and income calculation.
Yes, if your tax returns improve enough to support qualification. Many borrowers do this after restructuring their write-off strategy.