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in West Hollywood, CA
West Hollywood's entertainment, design, and creative industries mean most buyers here don't pull W-2s. You're choosing between two income verification methods, not two fundamentally different loan products.
Both options approve self-employed borrowers who can't show traditional paystubs. The real question is which documentation route gets you better terms based on how your business runs.
1099 loans verify income using your 1099 forms from clients, ideally showing steady revenue from a few key sources. Lenders calculate your qualifying income directly from those forms, typically averaging one or two years of receipts.
This works best if you're a contractor with consistent clients who issue proper 1099-NEC or 1099-MISC forms. Production companies, design studios, and consulting firms in WeHo often fit this profile perfectly.
Bank statement loans calculate income from deposits across 12 or 24 months of personal or business bank statements. Lenders average your deposits, subtract standard expense ratios (typically 25-50%), and use that as qualifying income.
This route helps borrowers with multiple small clients, cash flow through payment apps, or revenue that doesn't generate 1099s. You need organized banking records but not formal tax documentation from clients.
Documentation is the main split. 1099 loans need clean forms from clients plus your tax returns. Bank statement loans need consecutive months of statements showing deposits, regardless of whether those came with tax paperwork.
Rates vary by borrower profile and market conditions, but bank statement loans often price slightly higher because lenders view deposit verification as less precise than IRS forms. Credit and down payment requirements run similar for both, usually 620+ credit and 10-20% down.
Choose 1099 loans if you have a few major clients who properly document payments and your tax returns show income matching those forms. This path typically delivers better pricing and cleaner underwriting.
Go with bank statement loans if your revenue comes from dozens of small clients, payment platforms, or sources that don't generate 1099s. You're trading slightly higher rates for flexibility on documentation. Most WeHo creatives with diversified income streams end up here.
Most lenders pick one verification method per file to keep underwriting clean. If you have solid 1099s, stick with that route for better pricing.
Yes, business accounts work and often show clearer revenue patterns than personal accounts. Some lenders prefer them because deposits separate personal from business activity.
Lenders typically average one or two years of 1099 income, sometimes allowing upward trends if recent years are stronger. They don't apply the same expense deductions used for bank statement loans.
Lenders average deposits over 12-24 months to smooth out fluctuations. Longer statement periods help if your income varies seasonally or project-to-project.
Most bank statement programs require 12 or 24 months. Shorter periods don't give lenders enough data to confirm stable income patterns.