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in Gustine, CA
Self-employed borrowers in Gustine face a common problem: great income that doesn't show up cleanly on tax returns. Both 1099 loans and bank statement loans solve this, but they pull income differently.
Your choice depends on how you file taxes and what shows in your accounts. One focuses on what you report, the other on what actually flows through your business.
1099 loans use your tax forms to calculate income. Lenders review your 1099s from the past two years, sometimes adding tax returns to verify what you reported to the IRS.
This works well if you write off fewer expenses and show higher net income. You need consistent 1099 income and typically 10-20% down depending on credit score.
Most programs require 620+ credit and calculate income by averaging your 1099 earnings. If you filed accurate returns that reflect strong income, this path is straightforward.
Bank statement loans ignore your tax returns entirely. Lenders analyze 12 or 24 months of personal or business bank deposits to calculate income.
This works when you write off significant expenses that lower taxable income. The underwriter looks at total deposits, applies an expense factor (usually 25-50%), and qualifies you on what remains.
Most programs accept 600+ credit with larger down payments for lower scores. You need consistent deposits and reasonably clean bank activity without frequent NSFs or overdrafts.
The core split: 1099 loans care what you told the IRS, bank statement loans care what hit your account. If your tax returns show $100K but your deposits show $200K, bank statements win.
Bank statement loans typically cost more. Expect rates 0.5-1.5% higher than 1099 options because lenders view cash flow analysis as riskier than filed tax documents.
1099 loans move faster with cleaner underwriting when your returns are solid. Bank statement loans require detailed deposit analysis that adds time but unlocks higher qualifying income.
Choose 1099 loans if your tax returns reflect your true earning power and you don't write off everything. You'll get better rates and faster approval with solid 1099 documentation.
Choose bank statement loans if aggressive write-offs tank your taxable income but cash still flows. Most Gustine self-employed buyers with Schedule C businesses and heavy deductions land here.
Run the numbers both ways. Sometimes your 1099 income qualifies you for enough house. Other times, only bank statements get you to your target loan amount.
No. Lenders pick one income calculation method per loan. You'll submit both during underwriting, but they'll qualify you using whichever approach shows stronger income.
1099 loans typically price 0.5-1.5% lower than bank statement programs. Tax-verified income carries less perceived risk than cash flow analysis.
Not always required but helps. Business licenses, operating agreements, or CPA letters strengthen your file for both programs.
Lenders average two years, so one down year hurts but doesn't kill the deal. Bank statements might work better if deposits stayed strong despite lower reported income.
Yes. Both programs work for investment purchases, though expect higher rates and larger down payments than primary residence deals.