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in Tiburon, CA
Tiburon's median home price pushes most self-employed borrowers into non-QM territory. Traditional lenders won't approve you without two years of tax returns showing stable income.
Both 1099 loans and bank statement loans let you qualify on actual cash flow instead of written-down income. The difference comes down to how cleanly your 1099s reflect what you actually earn.
Most consultants and tech contractors in Marin County have straightforward 1099 income. If your bank deposits tell a clearer story than your tax forms, bank statement loans make more sense.
1099 loans use your IRS forms as proof of income. Lenders add up your 1099s, apply an expense ratio, and qualify you on the net.
This works great if you're a contractor with minimal write-offs. If you earned $400K on 1099s and spent $50K on business costs, you qualify on roughly $350K.
The problem hits when you write off everything for tax benefits. A consultant showing $200K in 1099 income but $150K in deductions only qualifies on $50K.
Expect rates 0.5% to 1.5% above conventional. Most lenders want 15-20% down and a 660+ credit score for Tiburon properties.
Bank statement loans use 12 to 24 months of business or personal bank deposits. Lenders total your deposits, subtract transfers between accounts, and apply a 25-50% expense factor.
This program shines when you maximize tax deductions. Your bank statements show $40K monthly deposits even though your tax return claims $15K income after write-offs.
You need clean statements with consistent deposits. Lenders will average the last 12-24 months, so one slow quarter won't kill the deal.
Rates run 1% to 2% higher than conventional. Expect 20-25% down for Tiburon homes, especially above $2M.
1099 loans require matching paper trails. Your 1099 forms need to align with what actually hit your accounts.
Bank statement loans ignore your 1099s entirely. Lenders only care about consistent deposits, which helps if you write off 60% of your income.
Documentation differs sharply. 1099 loans need your tax forms and possibly a CPA letter. Bank statements just need PDF exports from your bank.
Pricing favors 1099 loans by about 0.25-0.5% when you qualify for both. But that edge disappears if heavy deductions force you into a lower loan amount.
Choose 1099 loans if your forms reflect 80%+ of your actual earnings. Contractors billing through one or two clients usually fit this profile.
Bank statement loans work when your tax strategy prioritizes deductions. Real estate agents, business owners, and consultants with heavy expense schedules qualify for more this way.
Run both scenarios with your broker. The rate difference might be 0.375%, but bank statements could qualify you for $300K more loan.
For Tiburon properties, that extra buying power often outweighs slightly higher rates. A $2.2M home at 7.5% beats a $1.9M home at 7.125%.
No. Lenders pick one income calculation method. You'll apply under either 1099 or bank statement guidelines, not both.
1099 loans typically price 0.25-0.5% better than bank statement loans. Rates vary by borrower profile and market conditions.
Most lenders want 12-24 months. Bank statement loans can use just 12 months if deposits are strong and consistent.
Lenders average the most recent 12-24 months. A drop impacts both programs, but bank statements smooth out monthly fluctuations better.
Yes. Your loan closes based on current income documentation. Future tax strategies don't affect an approved loan.