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in Paramount, CA
Paramount's self-employed borrowers have two strong non-QM paths: 1099 loans and bank statement loans. Both skip tax returns, but they verify income differently.
The right choice depends on how you structure your business income. 1099 contractors often prefer one route, while business owners with mixed deposits lean toward the other.
1099 loans use your 1099 forms to calculate qualifying income. Lenders typically average your 1099 earnings over 12-24 months to determine what you can afford.
This works best for contractors who get clean 1099s without major business expenses eating into the totals. You need consistent 1099 income from the same sources.
Expect rates 1-2% above conventional loans. Most lenders want 10-15% down and credit scores above 620, though some programs accept 600.
Bank statement loans analyze deposits in your business or personal accounts over 12 or 24 months. Lenders calculate income by averaging monthly deposits and applying an expense factor.
This program shines for business owners who write off heavy expenses or mix business with personal accounts. The bank doesn't care what your tax return shows.
Rates run similar to 1099 loans, about 1-2% higher than conventional. You'll need 10-20% down depending on the lender, with credit minimums around 600-620.
The core split: 1099 loans look at reported contractor income, while bank statement loans track actual cash flow. If your 1099s reflect most of your earnings, that's the cleaner path.
Bank statement loans handle complexity better. Multiple income streams, cash deposits, or heavy expense deductions all work fine because lenders see the full deposit picture.
Documentation differs sharply. 1099 loans need those tax forms plus proof you're still contracting. Bank statements require 12-24 months of account history, sometimes from multiple accounts.
Choose 1099 loans if you're a straightforward contractor with consistent 1099 income and few deductions. This path involves less paperwork and faster underwriting when your forms are clean.
Pick bank statement loans if you own a business, write off substantial expenses, or blend multiple income types. The deposit analysis captures earnings your tax return doesn't show.
Paramount borrowers often lean toward bank statements because self-employed income here tends to be mixed. Talk to a broker who can run both scenarios with real numbers.
Yes, but lenders will choose the method that shows higher qualifying income. Most brokers run both calculations to maximize your buying power.
Rates typically run 1-2% higher than conventional loans. That premium pays for flexibility in income verification without tax returns.
Expect 3-5 weeks from application to closing. Bank statement loans may take slightly longer due to deposit analysis complexity.
Some lenders allow hybrid documentation, but most prefer one method. The approach showing stronger income usually wins.
Lenders average deposits over 12-24 months to smooth volatility. Larger sample periods help if your income fluctuates seasonally.