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in Sausalito, CA
Sausalito's creative professionals and business owners often need non-traditional mortgage options. Both 1099 loans and bank statement loans serve self-employed borrowers who can't prove income through W-2s.
The right choice depends on how you run your business and what documentation you keep. Most Sausalito borrowers qualify for one option more easily than the other based on their tax strategy.
1099 loans use your 1099 forms to document income. Lenders average your last two years of 1099 earnings to determine what you can afford.
This works well if you receive clean 1099s from consistent clients. You need steady contractor relationships and minimal business write-offs reducing your reported income.
Most programs require 620+ credit and 15-20% down. Rates run 1-2% above conventional loans because of the non-QM structure.
Bank statement loans use 12-24 months of business or personal bank deposits to calculate income. Lenders apply a percentage to your average monthly deposits after removing transfers and large one-time items.
This option works when your business has healthy cash flow but heavy tax deductions. Many Sausalito entrepreneurs write off expenses that reduce taxable income but still show strong deposits.
You need 620+ credit and typically 15-25% down. Rates run similar to 1099 loans but give more flexibility on income calculation.
The main split comes down to tax strategy. If you maximize deductions and show low taxable income, bank statements work better because they see gross deposits before write-offs.
1099 loans require cleaner income reporting. You need tax returns showing income close to what you actually earn, which doesn't work if you write off half your revenue.
Documentation differs significantly. Bank statement loans need 12-24 months of statements and a CPA letter. 1099 loans need two years of tax returns and recent 1099 forms from clients.
Choose 1099 loans if you have consistent contractor clients and don't write off most of your income. This path is simpler when your tax returns already show strong earnings.
Pick bank statement loans if you run an LLC, have multiple income streams, or maximize business deductions. The bank statement approach captures your real earning power even with aggressive tax planning.
Most Sausalito self-employed borrowers fit the bank statement profile better. The creative and consulting economy here tends toward variable income and smart tax strategies that hide true cash flow from traditional underwriting.
Yes, lenders can pivot between both during underwriting. We often submit both documentation sets upfront to see which yields better approval terms.
Both handle jumbo amounts common in Sausalito. Expect 20-25% down on purchases above $1.5 million regardless of which program you use.
Both take 3-4 weeks typically. Bank statement loans sometimes run longer when lenders question large irregular deposits that need explanation.
Yes. Sole proprietors with clean 1099s can use either program, but LLC owners almost always need bank statement loans.
Some lenders allow hybrid approaches. This works when you have both W-2 and 1099 income or want to supplement 1099 documentation with deposits.