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in Manhattan Beach, CA
Manhattan Beach self-employed borrowers have two solid non-QM paths. Both skip tax returns, but they verify income differently.
1099 loans pull straight from your contractor statements. Bank statement loans track deposits over 12-24 months.
The right choice depends on how you structure income and what's easier to document. Most borrowers qualify for one but not both.
1099 loans verify income through your annual 1099 forms from clients. Lenders calculate qualifying income from those contractor statements.
You need clean 1099 documentation showing consistent clients. This works best if most income comes through formal contractor relationships.
Rates typically run 0.5-1% above conventional loans. Credit minimums start at 620, though 680+ gets better pricing.
Bank statement loans analyze 12-24 months of business or personal account deposits. Lenders apply a percentage to total deposits as qualifying income.
This option works for business owners who mix income sources or don't issue themselves 1099s. You avoid showing tax returns completely.
Expect rates 1-2% above conventional programs. Most lenders want 640+ credit and 15-20% down for purchase loans.
1099 loans need formal contractor documentation from clients. Bank statement loans just need consistent deposits in your accounts.
Income calculation differs sharply. 1099 uses gross contractor income. Bank statements apply 50-75% of deposits depending on account type.
Bank statement programs accept more income complexity. 1099 loans require cleaner contractor relationships with identifiable clients.
Down payment requirements run similar for both. Rates on 1099 loans typically beat bank statement programs by 0.25-0.75%.
Choose 1099 if you work as an independent contractor with clear client relationships. This path gives cleaner income calculation and better rates.
Pick bank statements if you own a business with mixed revenue streams. This works when income doesn't show up as neat 1099 forms.
Manhattan Beach properties often require jumbo amounts. Both programs handle high balances, but bank statement loans offer more underwriting flexibility.
Run both options. We see 30% of self-employed borrowers qualify better under one program versus the other based on documentation.
No, lenders pick one method per loan. You choose the documentation path that shows stronger income for qualifying purposes.
1099 loans close slightly faster since documentation is simpler. Bank statement reviews take 2-3 extra days for deposit analysis.
Neither program requires tax returns. That's the main advantage over conventional self-employed loans which need two years of returns.
Irregular deposits hurt bank statement qualification. 1099 loans work better if income timing varies but annual contractor totals stay consistent.
Yes, both handle purchase and refinance transactions. Cash-out refinance limits typically max at 75-80% loan-to-value for non-QM programs.