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in Brea, CA
Self-employed borrowers in Brea have multiple paths to homeownership. Both 1099 loans and bank statement loans help when traditional income documentation falls short.
These non-QM options serve independent contractors, freelancers, and business owners. Each uses different methods to verify your income and qualify you for a mortgage.
Understanding the differences helps you choose the right loan for your financial situation. Rates vary by borrower profile and market conditions.
1099 loans use your 1099 forms to verify income as an independent contractor or freelancer. This works well if you receive traditional 1099 income statements from clients.
Lenders review your 1099 forms from one or two years to calculate qualifying income. This approach suits contractors with consistent 1099 documentation.
The process is straightforward if your income comes primarily through 1099 forms. You avoid the complexity of profit-and-loss statements or tax returns.
Bank statement loans use 12 to 24 months of personal or business bank statements to verify income. This method calculates deposits to determine your qualifying income.
These loans work for self-employed borrowers with varied income sources or business structures. They capture income that might not show clearly on tax returns.
Lenders analyze your bank deposits and may apply expense factors based on your business type. This flexibility helps business owners with complex finances.
The main difference lies in documentation requirements. 1099 loans need specific income forms, while bank statement loans use deposit history.
Bank statement loans offer more flexibility for business owners with various income streams. 1099 loans work best when your income comes through clear 1099 documentation.
Processing time and underwriting can vary between these options. Your lender will review which documentation method presents your income most favorably.
Choose 1099 loans if you receive most income through 1099 forms from clients. This option works well for contractors and freelancers with straightforward arrangements.
Bank statement loans suit business owners with multiple income sources or significant business expenses. They help when tax returns don't reflect actual cash flow.
Consider working with a Brea mortgage broker to compare both options. They can analyze your specific situation and recommend the best path forward.
Yes, many borrowers qualify for both options. Your mortgage broker can review which method produces better qualifying income for your situation.
Rates vary by borrower profile and market conditions. Both are non-QM loans with similar rate structures based on your credit and down payment.
1099 loans typically review one to two years of forms. Bank statement loans require 12 to 24 months of statements for income calculation.
Non-QM loans often require larger down payments than conventional loans. Specific requirements depend on your credit score and overall profile.
Closing times are similar for both loan types. The key factor is having complete documentation ready when you apply for either option.