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in South Pasadena, CA
South Pasadena self-employed borrowers face a choice between two non-QM options. Both skip tax returns, but they verify income differently.
1099 loans work for contractors with clean income reports. Bank statement loans fit business owners who write off most earnings.
1099 loans use your contractor income forms to prove earnings. Lenders calculate your qualifying income from 1099s, not tax returns.
You typically need 12-24 months of 1099 history. Same clients or diverse contracts both work if income stays steady.
Credit requirements start around 620. Down payments run 10-20% depending on the property and your profile.
Bank statement loans analyze deposits over 12-24 months. Lenders look at business and personal accounts to calculate income.
This option works when you write off significant expenses. Lenders use gross deposits before business costs reduce your taxable income.
Most programs require 640+ credit. Down payments start at 10% but can go higher based on risk factors.
Income calculation separates these options. 1099 loans use reported contractor income. Bank statement loans analyze cash flow regardless of tax strategy.
Documentation burden differs too. 1099 loans need cleaner paperwork. Bank statement loans require explaining deposits and irregular transactions.
Rates vary by borrower profile and market conditions. Bank statement loans often price slightly higher due to underwriting complexity.
Choose 1099 loans if you report most income without heavy deductions. This path works for consultants and contractors with straightforward earnings.
Pick bank statement loans if tax write-offs reduce your reportable income significantly. Business owners with equipment costs or overhead fit here.
Both options serve South Pasadena self-employed buyers well. Your tax strategy determines which program qualifies you for more house.
Most lenders pick one verification method per loan. Mixing approaches creates underwriting conflicts that delay approval.
Rates vary by borrower profile and market conditions. 1099 loans often price slightly better due to cleaner income documentation.
Both programs typically require 12-24 months of history. Longer track records sometimes unlock better terms.
Yes, both handle 1-4 unit properties. Investment properties usually require larger down payments and higher credit scores.
Absolutely. We often test both options during pre-approval to see which qualifies you for more.