Loading
in Atwater, CA
Self-employed borrowers in Atwater face a key choice: prove income with 1099 forms or bank statements. Both are non-QM loans designed for people who don't get W-2s, but they verify income differently.
Most Merced County self-employed buyers pick the option that shows their income most accurately. A landscaper with big expenses shows better on 1099s. A cash-heavy restaurant owner usually needs bank statements.
1099 loans use your tax forms to verify income. Lenders pull from line 1 of your 1099-NEC or Schedule C. You need two years of returns showing consistent earnings.
This loan works best when your write-offs are minimal. If you claim $80k but deduct $40k in expenses, lenders qualify you on $40k. High deductions kill your buying power here.
Bank statement loans skip tax returns entirely. Lenders review 12 or 24 months of business or personal bank deposits. They calculate average monthly income from those deposits.
You'll typically qualify on 50% of deposits for personal accounts or 75% for business accounts. Lenders assume the rest covers business expenses. This method ignores what you told the IRS.
The main split is expense treatment. 1099 loans penalize you for every business deduction. Bank statement loans assume expenses automatically, so your write-offs don't matter.
Credit score requirements run similar, usually 620-640 minimum. Down payments start at 10-15% for both. Rates vary by borrower profile and market conditions but typically sit 0.5-1.5% above conventional rates.
Go with 1099 loans if you run a lean operation with few write-offs. Consultants, designers, and IT contractors often fit here. Your tax returns show most of what you earn.
Pick bank statement loans if you write off vehicles, home office, meals, or equipment. Contractors, real estate agents, and retail business owners usually qualify for more this way. We run both calculations to find your higher approval amount.
No. Lenders require one income documentation method per loan. We pick whichever shows stronger qualifying income before applying.
Usually yes, 10-15% minimum. Higher credit scores and larger down payments improve your rate on both options.
Both take 30-45 days typically. Bank statement loans sometimes move quicker if your statements are clean and organized.
Both carry higher rates than W-2 conventional loans. Expect 0.5-1.5% above standard rates depending on your profile.
1099 loans average two years together. Bank statements use recent 12-24 months, capturing more current earnings if you've grown.