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in Monrovia, CA
Both 1099 loans and bank statement loans serve self-employed borrowers in Monrovia who can't verify income through W-2s. The difference comes down to how you document what you earn and which type of income shows up cleanest on paper.
1099 contractors with straightforward tax returns typically fare better with 1099 loans. Self-employed borrowers who write off heavy business expenses usually get higher qualifying income through bank statement programs.
1099 loans let independent contractors qualify using their 1099 forms and tax returns from the past two years. Lenders calculate your income the same way they would for W-2 earners, but using 1099 documentation instead of pay stubs.
This program works well if your tax returns reflect strong net income after deductions. You'll need decent credit—typically 620 minimum—and solid documentation of consistent 1099 earnings over 24 months.
Rates run close to conventional loans when your credit and income look clean. Monrovia contractors with steady client relationships and straightforward expenses get approved faster through this route.
Bank statement loans ignore your tax returns completely. Lenders pull 12 to 24 months of business or personal bank statements and calculate income from your deposits.
This matters for Monrovia business owners who write off equipment, home offices, travel, and other expenses that tank their net income on paper. Bank statements show gross revenue before deductions hit.
You'll pay slightly higher rates than 1099 loans—typically 0.5% to 1% more—because lenders price the added flexibility. Credit requirements start around 620, but stronger scores unlock better terms.
The core split is tax returns versus cash flow. 1099 loans require clean tax returns showing strong net income. Bank statement loans look only at what hits your accounts, ignoring what you reported to the IRS.
Documentation also differs sharply. 1099 loans need two years of returns, all 1099 forms, and sometimes a CPA letter. Bank statement loans skip the returns but require consecutive months of statements with no gaps.
Rates vary by borrower profile and market conditions, but bank statement loans typically cost more. That premium buys you the ability to qualify on gross deposits instead of net income after business expenses hammer your bottom line.
Choose 1099 loans if your tax returns already show solid income and you take modest deductions. This route gets you lower rates and mimics traditional mortgage underwriting using your actual filings.
Go with bank statement loans if you maximize write-offs and your taxable income doesn't reflect actual cash flow. Monrovia entrepreneurs who reinvest heavily in their businesses qualify for larger loan amounts this way.
Credit matters equally for both programs. A 680+ score gives you negotiating room. Below 640, expect higher rates or larger down payments regardless of which program you choose.
Yes, many Monrovia self-employed borrowers qualify for both. We run the numbers each way to see which delivers better terms and loan amounts based on your specific income documentation.
1099 loans typically close slightly faster because underwriters are familiar with tax return analysis. Bank statement reviews take a few extra days as lenders calculate deposits across 12-24 months.
Both support primary residences and investment properties in Monrovia. Some lenders restrict bank statement loans to primary homes only, so program options narrow for rental purchases.
Depends on your write-offs. If business deductions cut your taxable income by 40%, bank statements could boost your qualifying income by a similar percentage, potentially adding $100K+ to your loan amount.
Both typically require 15-20% down for primary homes in Monrovia. Investment properties push that to 25-30% regardless of which income documentation method you use.