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in Fullerton, CA
Self-employed borrowers in Fullerton have two strong non-QM mortgage options. Both 1099 loans and bank statement loans help independent workers qualify without traditional W-2 income documentation.
These alternative income verification methods serve Orange County's thriving self-employed community. Each loan type has unique features that suit different business structures and income patterns.
Rates vary by borrower profile and market conditions. Understanding the differences helps you choose the right financing for your Fullerton home purchase or refinance.
1099 loans use your 1099 forms to verify income as an independent contractor or freelancer. This option works well if you receive most income through 1099 documentation from clients.
Lenders review your 1099 forms from the past one to two years. They calculate your qualifying income based on what clients reported paying you.
This straightforward approach benefits contractors who have consistent 1099 income. It eliminates the need for complex tax return analysis or bank statement reviews.
Bank statement loans use 12 to 24 months of personal or business bank statements for income verification. This non-QM option serves self-employed borrowers who may not receive 1099 forms regularly.
Lenders analyze deposits to calculate your average monthly income. They typically use a percentage of total deposits after removing transfers and non-income items.
This flexibility helps business owners who take significant tax deductions. Your actual cash flow matters more than your taxable income on returns.
The main difference lies in documentation type and income calculation methods. 1099 loans rely on client-reported income forms while bank statement loans analyze actual deposits.
Bank statement loans offer more flexibility for business owners with multiple income streams. 1099 loans work better for contractors with straightforward client relationships and clear documentation.
Processing time and underwriting can vary between the two options. Bank statement loans may require more detailed analysis of deposits and business expenses.
Choose 1099 loans if most income comes from clients who issue 1099 forms. This option suits freelancers and contractors with documented independent work relationships.
Bank statement loans better serve business owners with varied income sources or significant tax deductions. They work well if you receive payments through multiple channels or operate as a business entity.
Consider your documentation availability and income complexity when choosing. A Fullerton mortgage broker can review your specific situation and recommend the best fit.
Some lenders allow hybrid approaches. However, most Fullerton borrowers choose one primary verification method. Your broker can determine if combining documentation helps your specific case.
Rates vary by borrower profile and market conditions. Neither loan type consistently offers better rates. Your credit score, down payment, and income stability affect pricing more than the loan type itself.
1099 loans typically require one to two years of 1099 forms. Bank statement loans need 12 to 24 months of statements. Your lender will specify exact requirements based on your situation.
Yes, both programs accommodate Fullerton and Orange County home prices. Loan limits depend on the specific lender and program. Many non-QM lenders offer jumbo loan amounts for higher-priced properties.
1099 loans may process slightly faster due to simpler documentation. Bank statement loans require more detailed deposit analysis. Both typically close within 30-45 days with complete documentation.