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in Torrance, CA
Self-employed borrowers in Torrance face a choice: qualify with 1099s or bank statements. Both skip the W-2 requirement, but they verify income differently and appeal to different business structures.
1099 loans work for contractors who get clean forms from clients. Bank statement loans dig into deposits — better when your income flows through business accounts with lots of write-offs.
1099 loans use your contractor income forms to prove earnings. Lenders average your 1099 income over 12 to 24 months and calculate qualifying income from there.
This path works well for consultants, freelancers, and contractors who get proper 1099-NEC or 1099-MISC forms from multiple clients. You need consistent year-over-year income and clean documentation.
Expect rates 1 to 2 points higher than conventional loans. Most lenders want 15 to 20 percent down and credit scores above 640.
Bank statement loans analyze 12 to 24 months of business or personal account deposits. Lenders calculate income by reviewing total deposits and applying expense ratios.
This option shines for business owners with heavy tax write-offs. If your tax return shows $60k but your accounts show $150k flowing through, bank statements tell the real story.
You can use personal or business statements. Rates run similar to 1099 loans — 1 to 2 points above conventional. Down payment and credit requirements mirror 1099 products.
The core split is documentation type. 1099 loans need IRS forms from your clients. Bank statement loans need monthly account records showing deposits — no 1099s required.
Income calculation differs too. 1099 lenders add up your forms and average them. Bank statement lenders total deposits and apply expense ratios between 25 and 50 percent depending on your business type.
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Choose 1099 loans if you're an independent contractor with multiple clients who issue proper forms. Your income needs to be stable and well-documented across tax years.
Pick bank statement loans if you run a business with significant expenses that reduce taxable income. This works for contractors who buy materials, restaurant owners, e-commerce sellers, and anyone whose tax returns understate actual cash flow.
Most Torrance self-employed borrowers fit one profile cleanly. But if you have both solid 1099 income and healthy bank deposits, run both scenarios — sometimes one calculation yields better qualifying income.
No. Lenders pick one income method per file. You can't combine 1099 income with bank statement income to boost your qualifying amount.
Rates are nearly identical. Both are non-QM products priced 1 to 2 points above conventional loans based on credit, down payment, and loan amount.
Most lenders want 24 months in the same line of work. Some accept 12 months if income is strong and stable with high credit.
Declining income hurts both loan types. Lenders average your income, so a drop reduces your qualifying power or kills approval entirely.
Yes. Bank statement loans accept business accounts for LLCs, S-corps, and sole proprietors. Lenders apply expense ratios based on your business structure.