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in Loomis, CA
Both loan types serve self-employed borrowers in Loomis who can't verify income with W-2s. The difference comes down to how you document what you earn.
1099 loans use tax forms that independent contractors receive from clients. Bank statement loans skip tax returns entirely and just analyze your deposits.
Most self-employed borrowers qualify for one but not both. Your business structure and how you manage income determine which path makes sense.
1099 loans use the tax forms you get from clients to prove income. Lenders total your 1099s and apply them to qualification ratios.
This works best if you receive consistent 1099 income and write off few business expenses. You need at least one year of 1099 history, ideally two.
Rates run 1-2% higher than conventional loans. Credit scores above 660 get better pricing. You can borrow up to $3 million on most properties.
Bank statement loans analyze 12-24 months of business or personal bank deposits. Lenders calculate average monthly income from your statements.
This works for borrowers who write off significant business expenses or run income through an LLC. Tax returns don't matter with this program.
Most lenders apply a 50% expense factor to your deposits. If you average $20,000 monthly deposits, they qualify you on $10,000 income.
1099 loans require you to claim that income on tax returns. Bank statement loans ignore tax returns completely and just look at cash flow.
Bank statement loans handle complex business structures better. If you run income through multiple accounts or entities, statements show the full picture.
Rates vary by borrower profile and market conditions, but bank statement loans typically cost 0.25-0.5% more than 1099 loans. Down payment requirements match at 10-20%.
Choose 1099 loans if you receive straightforward contractor income and report most of it on tax returns. The documentation is simpler and rates are lower.
Pick bank statement loans if you maximize tax deductions or operate through business entities. This path works when your tax returns show low income but your bank account tells a different story.
Some borrowers qualify for both and choose based on rate. We run scenarios for each option and show you the actual monthly payment difference.
No, lenders use one income method per loan. You pick the documentation path that shows your qualifying income most clearly.
Yes, you can use personal or business accounts. Lenders prefer business accounts but accept personal statements if that's where your income flows.
Most lenders want 620 minimum for both loan types. Scores above 680 unlock better rates and lower down payment options.
Statements must be within 90 days of closing. Lenders want consecutive months with no gaps in the 12 or 24 month period.
Yes, both programs work for investment properties. Down payments increase to 20-25% for non-owner occupied homes.