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in Westlake Village, CA
Self-employed borrowers in Westlake Village don't need W-2s to buy a home. Both 1099 loans and bank statement loans qualify you using alternative income documentation.
The right choice depends on how you get paid and what records you keep. One uses your 1099 forms, the other reads your bank deposits directly.
1099 loans qualify you using your 1099-MISC or 1099-NEC forms from the past two years. Lenders average your 1099 income to calculate what you can borrow.
This works best if most of your income shows up on 1099s and stays consistent year over year. You'll typically need 620+ credit and 10-20% down depending on the property.
Bank statement loans analyze 12 or 24 months of business or personal bank deposits. Lenders calculate your income by reviewing deposits and applying an expense ratio.
This option works for business owners who run expenses through their accounts or get paid in ways that don't generate 1099s. Rates typically run 0.25-0.75% higher than QM loans.
The core difference is documentation: 1099 loans need clean contractor income on official forms. Bank statement loans look at actual cash flow through your accounts.
HousingWire just reported that Rate launched RateFi, letting borrowers count crypto holdings as income and reserves for non-QM loans. That expands what qualifies as documented income beyond traditional 1099s or bank deposits.
Bank statement loans handle irregular income better but cost more in rate. 1099 loans price closer to conventional if your forms show stable earnings.
Choose 1099 loans if you're a consultant, contractor, or freelancer whose clients send annual 1099s. Your income needs to be consistent and fully documented on those forms.
Go with bank statement loans if you own a business, mix income sources, or write off significant expenses. This route handles complex cash flow that doesn't fit neatly on a 1099.
Most lenders pick one documentation method per loan. If you have both, your broker will run scenarios to see which gets you the better rate and loan amount.
Down payment minimums are similar for both, usually 10-20% depending on credit and property type. Your income documentation doesn't change the equity requirement.
1099 loans often close faster because the documentation is simpler. Bank statement loans need more underwriter review of deposit patterns and expense calculations.
Lenders average two years of 1099 earnings. A drop this year will lower your qualified income, making bank statements a better option if deposits stayed strong.
Yes, you can refinance between non-QM products anytime. Most borrowers do this to lower their rate or pull cash out as income documentation improves.