Loading
in Signal Hill, CA
Self-employed borrowers in Signal Hill face a choice between two non-QM paths. 1099 loans work off tax returns while bank statement loans skip the CPA entirely.
Both programs solve the same problem — getting approved without W-2s. The right pick depends on how you document income and what shows up in your financials.
1099 loans use your tax returns to calculate income — specifically the 1099 forms you file. Lenders average 12 to 24 months of gross receipts minus business expenses.
This works well if you write off minimal deductions and your tax returns show strong income. Rates start around 7.5% with 15% to 20% down typical for Signal Hill properties.
Bank statement loans calculate income from 12 or 24 months of business deposits. Lenders apply a 50% expense ratio to your average monthly deposits to estimate net income.
This route makes sense when your tax returns don't reflect real cash flow because you max out deductions. HousingWire just flagged Rate's new crypto qualification option for these non-QM products. Minimum 10% down for Signal Hill deals.
Documentation separates these programs. 1099 loans need tax returns and 1099 forms filed with the IRS. Bank statement loans need business account statements and nothing more.
Income calculation differs too. 1099 lenders use your reported gross minus expenses. Bank statement lenders take deposits and assume 50% went to overhead. If you write off 60% of revenue, bank statements will show higher qualifying income.
Choose 1099 loans if your tax returns already show solid income and you file clean returns every year. This path costs less and moves faster when your CPA keeps things simple.
Pick bank statement loans if you max out deductions or haven't filed recent returns. Contractors, consultants, and gig workers who deposit big but write off bigger fit this program better. We see more Signal Hill self-employed borrowers go this route.
Yes if we catch it early. We run income both ways during pre-approval to see which qualifies higher before locking.
Bank statement loans require business accounts with clear separation. 1099 loans just need filed tax forms showing 1099 income.
Processing takes 3-4 weeks for both. Bank statements can move quicker if your tax returns have issues or haven't been filed recently.
No. 1099 loans verify through tax returns. Bank statement loans need business account deposits to calculate qualifying income.
Both programs average 12 to 24 months of income. Seasonal fluctuations get smoothed out over the calculation period.