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in Fairfax, CA
Most Fairfax self-employed borrowers qualify for both 1099 loans and bank statement loans. The right choice depends on how your business deposits flow and what documents you can actually provide.
Both are non-QM products designed for people who don't fit conventional income rules. Neither requires tax returns showing full income. The main difference is how lenders calculate what you earn.
1099 loans use your 1099 forms from the last two years to prove income. Lenders typically count 100% of the gross income shown on those forms. You need consistent 1099 income from established clients.
This works best if you're a consultant or contractor who invoices clients regularly. Your CPA writes a letter confirming the 1099s are accurate. No need to show business bank accounts or explain every deposit.
Bank statement loans analyze 12 or 24 months of business deposits. Lenders add up all deposits, subtract returns or transfers, then apply a percentage based on your business type. Most borrowers qualify using 50% to 75% of deposits.
You don't need 1099s or a specific business structure. Works for cash-heavy businesses, gig workers, or anyone with irregular income sources. The trade-off is messier underwriting since every deposit gets scrutinized.
1099 loans give you higher qualifying income if your forms show big numbers. Bank statement loans work better when you have deposits that don't generate 1099s — like cash payments, app-based gig work, or retail sales.
Documentation is cleaner with 1099 loans: just the forms and a CPA letter. Bank statement loans require every page of your statements with explanations for large or unusual deposits. Processing takes longer and underwriters ask more questions.
Choose 1099 loans if most of your income comes from established clients who send forms. You'll qualify for more house and face fewer documentation headaches. Choose bank statement loans if you get paid in cash, use Venmo or Zelle, or mix several income streams.
Many Fairfax creatives and tech consultants fit both programs. Run the numbers both ways. Sometimes your 1099 gross income qualifies you better. Other times your bank deposits paint a stronger picture after the percentage haircut.
No, lenders pick one method per file. You can't combine them. Choose whichever shows higher qualifying income for your situation.
Yes, most non-QM lenders want 620 minimum for either option. Higher scores unlock better rates on both programs.
Rates are nearly identical since both are non-QM products. Your credit score and down payment matter more than which income method you use.
Expect 10-20% down for either program. Lenders sometimes allow less with strong credit and reserves, but that's case-by-case.
Lenders average the last two years, so one weak year hurts but doesn't disqualify you. Bank statements might work better if recent deposits stayed strong.