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in Rocklin, CA
Rocklin self-employed borrowers have two strong options for mortgage approval without W-2s. Both 1099 loans and bank statement loans bypass traditional income documentation, but they verify your earnings in different ways.
The right choice depends on how you receive income and what your business expenses look like. One route uses tax forms. The other uses bank deposits.
1099 loans use your tax forms to prove income. Lenders review the 1099 forms you receive from clients and calculate your qualifying income from those documents.
This works well if you write off minimal business expenses. If your 1099s show $120K but you deduct $80K in expenses, you qualify on $40K income. Rates start around 7.5-8.5% depending on credit and down payment.
Most lenders require 10-20% down and a 620 minimum credit score. You'll need two years of 1099 history in the same line of work to show income stability.
Bank statement loans skip tax returns entirely. Lenders analyze 12 or 24 months of personal or business bank statements to calculate your average monthly deposits.
This solves the expense problem. If you write off $80K but your bank shows $120K in deposits, you can qualify on the higher number. Underwriters typically count 50-75% of deposits as qualifying income.
Expect 10-20% down and rates in the 7.5-9% range. Credit requirements usually start at 620, though some lenders go down to 600 with larger down payments.
The core difference is what lenders look at. 1099 loans verify income from tax documents. Bank statement loans verify income from actual cash flow through your accounts.
Rates are usually comparable between the two. Bank statement loans sometimes run 0.25-0.5% higher because they involve more underwriting work. Both require similar down payments and credit scores.
Documentation differs significantly. 1099 loans need your tax forms, profit and loss statements, and business licenses. Bank statement loans need statements, a CPA letter, and proof your deposits come from business activity.
Choose 1099 loans if your tax returns reflect your true income. Freelancers and consultants who keep business expenses low see better qualifying numbers with this route.
Choose bank statement loans if you write off significant expenses. Rocklin contractors in construction, real estate, or trucking often deduct tools, vehicles, and materials that reduce taxable income but don't affect actual cash flow.
Your accountant can run both scenarios. Compare what you'd qualify for using 1099s versus what 50% of your bank deposits would support. The difference is often $50-100K in loan amount.
No. Lenders require you to choose one income verification method. You can't combine 1099 income with bank statement calculations on the same application.
Some do, some don't. Prepayment penalties are common on non-QM loans but vary by lender. Ask upfront if you plan to refinance within 3 years.
1099 loans typically close slightly faster because tax documents are simpler to review. Bank statement loans take 30-45 days due to detailed deposit analysis.
Yes, but it restarts underwriting. You're better off choosing the right path from the start based on your write-off situation.
Yes. Both loan types require at least two years of self-employment history in the same or related field to prove income stability.