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in Tustin, CA
Self-employed borrowers in Tustin have multiple paths to homeownership. Both 1099 loans and bank statement loans offer alternatives to traditional income verification.
These non-QM mortgage options serve independent contractors, freelancers, and business owners. Each program uses different methods to verify your ability to repay. Understanding the differences helps you choose the right financing for your situation.
1099 loans are designed for independent contractors and freelancers who receive 1099 income. This program recognizes that your tax forms can prove steady earning power.
Lenders review your 1099 forms to calculate qualifying income. This approach works well if you have consistent contract work. You'll typically need one to two years of 1099 documentation from similar work sources.
Bank statement loans use 12 to 24 months of personal or business bank statements to verify income. This method captures the full picture of your cash flow.
Lenders analyze deposits to calculate your average monthly income. This works especially well for business owners with significant expenses. The program looks at actual money flowing through your accounts rather than taxable income.
The main difference lies in documentation type. 1099 loans require tax forms showing contract income. Bank statement loans analyze actual deposits in your accounts.
Bank statement loans often benefit borrowers who write off many business expenses. 1099 loans work better for contractors with straightforward income reporting. Your business structure and tax strategy often determine which option provides stronger qualification.
Both programs require good credit and reasonable down payments. Rates vary by borrower profile and market conditions. Your mortgage broker can assess which documentation method shows your income most favorably.
Choose 1099 loans if you're an independent contractor with clean tax documentation. This works best when your 1099 income shows consistent earning patterns.
Bank statement loans suit business owners who reinvest heavily or have significant write-offs. If your tax returns understate actual cash flow, bank statements tell a better story. Tustin's diverse economy supports both entrepreneurial paths to homeownership.
A qualified mortgage broker can review both options with you. They'll analyze which documentation method maximizes your buying power. The right choice depends on your specific income structure and financial goals.
Many self-employed borrowers qualify for both programs. Your mortgage broker will determine which documentation method provides the strongest qualification and best terms for your situation.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment, and overall financial picture determine your specific rate more than the loan type.
1099 loans typically require one to two years of forms. Bank statement loans need 12 to 24 months of statements. Consistent income history strengthens both applications.
Yes, both loan types work for purchases and refinances throughout Tustin and Orange County. They're designed specifically to help self-employed borrowers access homeownership.
Both programs can accommodate seasonal income variations. Lenders average your income over the documentation period. Be prepared to explain seasonal patterns in your industry.