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in Garden Grove, CA
Self-employed borrowers in Garden Grove have unique financing needs. Traditional lenders often struggle to verify income for independent contractors and business owners.
Both 1099 Loans and Bank Statement Loans offer non-QM solutions for self-employed borrowers. Each program verifies income differently, making one potentially better suited to your situation.
Understanding these options helps you choose the right path to homeownership. Rates vary by borrower profile and market conditions for both loan types.
1099 Loans help independent contractors and freelancers who receive 1099 forms instead of W-2s. These loans verify your income using your 1099 statements from clients or businesses.
This option works well if you have consistent 1099 income streams. Lenders typically review one to two years of 1099 forms to calculate your qualifying income.
Freelancers, consultants, and gig workers often prefer this route. The process is straightforward when your income documentation is organized and readily available.
Bank Statement Loans use 12 to 24 months of personal or business bank statements. Lenders analyze deposits to determine your average monthly income for qualification purposes.
This approach works for business owners with varied income sources. It captures the full picture of your cash flow, not just documented contractor payments.
Self-employed professionals with complex income streams benefit most. The bank statement method accounts for multiple revenue sources flowing through your accounts.
The main difference lies in documentation requirements. 1099 Loans focus on formal income statements, while Bank Statement Loans review actual cash flow.
1099 Loans work best with clean, documented contractor income. Bank Statement Loans handle more complex situations where income comes from multiple sources or business structures.
Both programs serve self-employed borrowers but verify income differently. Your specific income structure determines which option provides easier qualification and better terms.
Choose 1099 Loans if you receive most income via 1099 forms from clients. This option is simpler when your income is straightforward and well-documented.
Bank Statement Loans suit business owners with varied income sources. If you mix cash deposits, transfers, and payments through your business, this method captures everything.
Consider how you receive and document income currently. The loan type matching your existing records will make the application process smoother and faster.
A qualified mortgage broker in Garden Grove can review your situation. They'll help determine which program offers the best rates and terms for your specific circumstances.
Some lenders offer flexibility in documentation. A broker can structure your application using the method that presents your income most favorably.
Rates vary by borrower profile and market conditions. Your credit score, down payment, and income stability matter more than the specific loan type you choose.
1099 Loans typically require 1-2 years of forms. Bank Statement Loans need 12-24 months of statements, depending on the lender's requirements.
Both non-QM loan types often require higher down payments than conventional loans. Expect 10-20% minimum, though requirements vary by lender and situation.
Yes, both programs can work with variable income. Bank Statement Loans often handle income fluctuations better by averaging deposits over the review period.