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1099 Loans in Torrance
Torrance has a concentrated self-employed population across aerospace, tech consulting, and healthcare contractors. Traditional lenders reject most 1099 earners because they can't verify income through W-2s.
Non-QM 1099 loans exist specifically for independent contractors who show income through tax returns instead of pay stubs. These programs underwrite to what you actually earn, not what an employer reports.
You need two years of 1099 history in the same line of work. Lenders average your gross income from those years, then apply debt ratios.
Credit minimums start at 620, but expect better rates above 680. Most programs cap at 80% loan-to-value for purchases, 75% for cash-out refinances.
Unlike bank statement loans, 1099 programs don't let you add back business expenses. Lenders use what you reported to the IRS, which means write-offs directly reduce your qualifying income.
Big banks don't touch 1099 loans. You need non-QM specialists who price these manually instead of running them through automated systems.
Rate spreads vary wildly between lenders on the same borrower profile. One wholesale lender might quote 7.25% while another comes in at 6.75% for identical terms.
Brokers access 15-20 non-QM lenders who actually fund 1099 programs. Direct lenders usually offer one program at higher rates because they don't shop your file.
Most 1099 earners qualify for more house using bank statement loans instead. If you deposit more than you report to the IRS, bank statements capture the full income picture.
I route Torrance contractors to bank statement programs about 60% of the time. The other 40% reported strong income on their tax returns and get better pricing through 1099 loans.
Never let a lender average just one year of income. Two-year averaging protects you if one year had a big project that inflated earnings temporarily.
Bank statement loans approve based on deposits, not tax returns. If you write off 40% of your gross income, bank statements ignore those deductions.
1099 loans work better for contractors who don't need aggressive write-offs and report most of their income. You get cleaner pricing because the income documentation matches what the IRS sees.
Profit and loss statement loans skip tax returns entirely but charge higher rates. Asset depletion loans use investment accounts as income, which makes sense for contractors with large stock portfolios.
Torrance aerospace contractors often have lumpy 1099 income with big projects creating uneven years. Lenders scrutinize declining income trends, so document why one year exceeded another.
Tech consultants working for South Bay startups sometimes mix 1099 and W-2 income. Most non-QM lenders will combine both sources if the 1099 work spans two years.
Healthcare contractors in the 90503 and 90505 ZIP codes typically report conservative income after write-offs. Bank statement loans consistently outperform 1099 programs for medical professionals.
No. All 1099 loan programs require two years of self-employment history in the same field. Lenders average both years to calculate qualifying income.
Yes. Lenders use your net income after deductions, not gross 1099 receipts. Every dollar you write off lowers your qualifying power.
Expect 0.75% to 1.5% above conventional rates. Your credit score and down payment size determine where you land in that range.
Yes, as long as all the work falls within the same industry or trade. Lenders combine all 1099 sources when calculating total income.
Lenders will question declining income and may use the lower year only. Be ready to explain seasonal variations or document new contracts.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Financing for building a new home or making major renovations, typically converting to a permanent mortgage upon completion.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.