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in San Marino, CA
Both options serve self-employed borrowers, but they document income differently. 1099 loans pull from tax forms while bank statement loans analyze deposits.
San Marino buyers with fluctuating revenue or aggressive write-offs often prefer one over the other. The right choice depends on how you structure your business and report earnings.
1099 loans rely on your tax returns to prove income. Lenders average two years of 1099 earnings to calculate what you qualify for.
This works well if your tax returns reflect strong income without heavy deductions. You need clean 1099s from clients and typically 620+ credit to get approved.
Rates run higher than conventional loans but lower than some non-QM options. Expect 10-20% down depending on your credit and debt profile.
Bank statement loans skip tax returns entirely. Lenders review 12 or 24 months of business or personal bank deposits to calculate income.
This helps borrowers who write off most revenue on taxes but show strong cash flow. Underwriters apply percentage adjustments based on whether you use personal or business accounts.
You need consistent deposits and 10-20% down. Credit minimums usually sit around 620, though some lenders go lower with larger down payments.
The core split is documentation style. 1099 loans need organized tax filings while bank statement loans need clean deposit records with minimal NSFs or overdrafts.
Bank statement loans often approve higher loan amounts for the same gross revenue because they don't factor in business expenses. If you write off 60% of income, bank statements show more qualifying power.
Rate pricing varies by lender and file strength. Bank statement loans sometimes cost 0.25-0.50% more due to added underwriting complexity, though this gap narrows with strong credit.
Choose 1099 loans if your tax returns already show solid net income after deductions. This path is cleaner for contractors who don't maximize write-offs or mix personal and business funds.
Pick bank statement loans if you aggressively reduce taxable income through expenses. San Marino's high property values mean maximizing loan amount matters, and bank statements usually deliver more buying power for self-employed filers.
Some borrowers qualify for both but find better terms with one based on their lender's pricing. We compare both across our network to find your lowest rate and highest approval odds.
Most lenders pick one income method per file. Some allow blending if you have multiple income streams, but it complicates underwriting and usually isn't needed.
1099 loans close slightly faster because tax returns are standardized documents. Bank statement reviews take longer since underwriters manually analyze deposits and flag irregular transactions.
Yes, both support cash-out refis for self-employed borrowers. Loan-to-value limits and seasoning requirements vary by lender but typically match purchase guidelines.
Underwriters exclude non-recurring deposits like loans, transfers between your accounts, or large gifts. They focus on consistent income patterns, not spikes.
Switching restarts underwriting since documentation and income calculations differ completely. Choose your path before submitting to avoid delays and re-pulls of credit.