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Redondo Beach has a strong freelance and contractor economy—tech consultants, real estate agents, marine industry specialists. Traditional lenders reject these borrowers despite solid income.
1099 loans skip the W-2 requirement completely. Lenders underwrite using your 1099 forms, typically from the last one or two years. Your business revenue becomes your qualifying income.
1099 Loans in Redondo Beach
Most lenders want 12-24 months of consistent 1099 income from the same clients or industry. Credit scores start at 620, but 680+ gets better pricing. Expect 10-20% down depending on loan amount.
Self-employed for less than two years? Some programs accept one year of 1099s if you stayed in the same field. Former airline pilot now consulting in aviation? That works.
Local decision guide
Use this guide to connect 1099 loans eligibility, lender expectations, and local market factors before comparing payment options in Redondo Beach.
Redondo Beach has a strong freelance and contractor economy—tech consultants, real estate agents, marine industry specialists. Traditional lenders reject these borrowers despite solid income.
1099 loans skip the W-2 requirement completely. Lenders underwrite using your 1099 forms, typically from the last one or two years. Your business revenue becomes your qualifying income.
Most lenders want 12-24 months of consistent 1099 income from the same clients or industry. Credit scores start at 620, but 680+ gets better pricing. Expect 10-20% down depending on loan amount.
Fannie and Freddie won't touch 1099 income without converting it through full tax returns—which kills your buying power after deductions. Non-QM lenders built these programs specifically for contractors.
Rates run 1-2% higher than conventional loans. That's the trade for skipping tax return analysis. Portfolio lenders price each deal individually based on your income stability and credit profile.
The underwriters calculate income differently across lenders. Some average your 1099s, others use a percentage of gross revenue. I've seen the same $180K in 1099 income qualify as $135K at one lender and $162K at another.
Redondo Beach contractors often carry business expenses on personal cards or mix 1099 with occasional W-2 gigs. Clean that up before applying. Three months of separated income streams makes underwriting smooth.
Bank statement loans work if your 1099s are messy or inconsistent. They use deposit patterns instead of tax forms. Trade-off: slightly higher rates and larger down payments.
Profit and loss loans let you add unreported income that doesn't show on 1099s. If you're doing side work or have cash clients, P&L gives you credit for that revenue with a CPA letter.
Redondo Beach homes near the water attract high-earning contractors who can't get conventional approval. Appraisals run smooth—the market stays liquid even in non-QM lending.
Property taxes and HOA fees impact your debt-to-income ratio the same as conventional loans. North Redondo single-family homes work better for tight ratios than ocean-view condos with $800 monthly HOAs.
Yes, lenders combine all 1099 income from the qualifying period. They want to see consistent earnings, not necessarily the same clients throughout.
Underwriters average the two years or use the lower year for qualification. A 20% drop year-over-year triggers extra documentation requirements.
Most lenders require personal returns to verify you filed and check for red flags. They don't use returns to calculate qualifying income like conventional loans.
Rates vary by borrower profile and market conditions. Typical debt-to-income ratios allow $600K-$700K purchase price with 15% down and moderate existing debts.
You need 12-24 months of history minimum. Exceptions exist if you worked W-2 in the same industry before going independent—like employed engineer to consulting engineer.