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in Corte Madera, CA
Self-employed borrowers in Corte Madera have two strong non-QM options when tax returns don't tell the full story. Both 1099 loans and bank statement loans skip traditional income verification, but they work differently.
Your choice depends on how you receive income and what documentation you can provide. Most independent contractors lean one way, while business owners with multiple revenue streams go the other.
These aren't interchangeable products. Each has specific qualification paths that favor different income structures.
1099 loans qualify you based on your 1099 forms from the past one or two years. Lenders calculate your income directly from what clients paid you, not what you reported after deductions.
This works best for consultants, freelancers, and contractors who get most income from 1099s. You need consistent payments from established clients, not scattered gig work.
Lenders typically average your 1099 income across 12 or 24 months. Credit requirements start around 620, and you'll need at least 10% down in Marin County.
Bank statement loans qualify you using 12 to 24 months of personal or business bank statements. Lenders calculate your income from deposits, applying an expense factor based on your business type.
This works for business owners with diverse income sources—retail, services, rental properties. Your deposits prove cash flow even when tax returns show heavy write-offs.
You'll need consecutive monthly statements with no gaps. Credit requirements mirror 1099 loans at 620 minimum. Down payments start at 10% but better rates kick in at 20%.
The biggest difference is documentation. 1099 loans need clean 1099 forms from clients. Bank statement loans need consistent deposits but don't care where they come from.
Income calculation differs too. 1099 loans use reported income directly. Bank statement loans apply expense ratios—typically 25% to 50%—which reduces your qualifying income.
Business structure matters. Sole proprietors with 1099 clients qualify easier for 1099 loans. LLCs and S-corps with mixed revenue fit bank statement loans better.
Rates run similar on both programs. Expect 1-2% above conventional rates. The real cost difference comes from how much income each program recognizes.
Choose 1099 loans if most of your income comes through 1099 forms and you have consistent repeat clients. This path gives you the cleanest income calculation without expense deductions.
Pick bank statement loans if you run a business with multiple income streams, take cash payments, or write off significant expenses. You need solid deposit history but more flexibility on income sources.
Some Corte Madera borrowers qualify for both. Run the numbers each way because expense factors on bank statements might reduce your buying power versus straight 1099 income.
We see plenty of self-employed Marin County buyers who switch programs mid-process after income calculations come back. Having both options keeps your purchase plans on track.
No. Lenders use one income verification method per loan. You pick the path that shows your income best, not a combination of both.
Rates run nearly identical on both programs. Your credit score and down payment affect pricing more than which documentation type you choose.
Not typically. 1099 loans use your actual forms. Bank statement loans use deposits without CPA verification or explanations.
Most lenders require 12 to 24 months of documentation. Two years of history strengthens your application on either program.
Bank statement loans handle this better. They capture all deposits regardless of source, while 1099 loans only count reported contractor payments.