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in San Clemente, CA
Self-employed borrowers in San Clemente have flexible mortgage options beyond traditional loans. Both 1099 Loans and Bank Statement Loans help independent workers qualify without W-2 income.
These non-QM loans serve the many freelancers, contractors, and business owners in Orange County. Each program verifies income differently to match how self-employed people actually earn money.
Choosing the right loan depends on how you receive income and what documentation you have. Understanding both options helps you move forward with confidence.
1099 Loans use your 1099 forms to verify income as an independent contractor or freelancer. This works well if you receive most income through 1099 reporting from clients.
Lenders review your 1099 documents from the past one to two years. They calculate your qualifying income based on these forms, making the process straightforward for contractors.
This option suits borrowers who have consistent 1099 income streams. It eliminates the need for complex business tax returns in many cases.
Bank Statement Loans examine 12 to 24 months of personal or business bank statements. Lenders analyze deposits to determine your average monthly income.
This approach works for self-employed borrowers who may not have traditional income documentation. Business owners who write off many expenses often benefit from this method.
The bank statement review shows actual cash flow rather than taxable income. This helps borrowers who show lower income on tax returns due to legitimate deductions.
The main difference lies in documentation type. 1099 Loans require specific tax forms, while Bank Statement Loans use deposit history to prove income.
1099 Loans work best when you receive clear contractor payments reported on 1099 forms. Bank Statement Loans fit borrowers with varied income sources or complex business structures.
Both programs offer flexible underwriting compared to conventional loans. Rates vary by borrower profile and market conditions for each option.
Choose 1099 Loans if most income comes through contractor payments with proper 1099 reporting. This path offers simpler documentation if your situation matches.
Select Bank Statement Loans if you own a business with multiple income streams or take many deductions. This works better when tax returns don't reflect true earning capacity.
A San Clemente mortgage broker can review your specific situation and income documentation. They'll recommend the program that maximizes your buying power in Orange County.
Yes, some borrowers qualify for both programs. A broker will analyze which option provides better rates and terms based on your specific income documentation.
Both programs typically close in 30-45 days. Bank Statement Loans may take slightly longer due to deposit analysis, but timelines are comparable overall.
Non-QM loans often carry slightly higher rates due to flexible underwriting. Rates vary by borrower profile and market conditions for both options.
Most lenders require credit scores of 600-640 minimum for these programs. Higher scores unlock better rates and terms for both loan types.
Yes, both 1099 and Bank Statement Loans can finance investment properties. Self-employed investors often use these programs for rental homes in Orange County.