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in Mill Valley, CA
Mill Valley has plenty of consultants, creatives, and business owners who don't fit standard W-2 underwriting. Both 1099 and bank statement loans qualify self-employed borrowers, but they verify income differently.
Your best option depends on how your income flows and how you structure deductions. Most self-employed borrowers have strong preference for one over the other once they see the income calculation.
1099 loans use your 1099 forms to prove income, typically averaging 12-24 months. Lenders apply standard deductions like business expenses and write-offs shown on your tax returns.
This works best if you claim minimal deductions and your 1099 income is strong and consistent. Your qualifying income matches what you report to the IRS after business expenses.
Bank statement loans skip tax returns entirely and use deposits from 12-24 months of business or personal bank statements. Lenders calculate income from total deposits minus standard expense factor.
This route shines when you write off heavily for tax purposes but have strong cash flow. Your qualifying income reflects actual deposits, not what you report after deductions.
The income calculation separates these two completely. 1099 loans follow IRS-reported income after deductions. Bank statement loans ignore tax returns and calculate from deposit activity with typical 50% expense assumption.
Documentation differs too. 1099 loans need your forms plus tax returns showing business income. Bank statements only require 12-24 months of statements and nothing else for income verification.
Rates vary by borrower profile and market conditions. Bank statement loans typically carry slightly higher rates because lenders view the verification method as higher risk. 1099 loans price closer to conventional when income is clean.
Choose 1099 loans if you file straightforward returns with moderate deductions and consistent 1099 income. This works for consultants and contractors who don't heavily optimize for tax purposes.
Go bank statement route if you maximize write-offs and your tax returns show minimal income despite strong cash flow. Most Mill Valley business owners with S-corps or significant expense strategies qualify better this way.
Run the numbers both ways before deciding. Pull your last two years of 1099s and bank statements, and we can calculate which method yields higher qualifying income for your situation.
No, lenders require one income verification method per loan. You choose the route that shows stronger qualifying income for your situation.
Personal accounts work fine if all business income flows through them. Business accounts are acceptable too, whichever shows your complete income picture.
Rates vary by borrower profile and market conditions. 1099 loans typically price 0.25-0.75% lower than bank statement loans due to verification method.
Most lenders want 12-24 months of 1099 history. Two years provides stronger qualification and shows income consistency to underwriters.
Lenders average the income over the statement period. Seasonal or project-based fluctuations are acceptable as long as the trend is stable.