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in Portola, CA
Self-employed borrowers in Portola have two strong non-QM paths to financing. Both skip traditional tax returns, but they verify income differently.
1099 loans work for contractors with clean business accounting. Bank statement loans fit borrowers who write off most of their income or mix personal and business expenses.
Your choice depends on how you structure your business and what records you keep. Most Portola self-employed buyers qualify for one but not both.
1099 loans use your 1099 forms to prove income. Lenders look at what clients paid you, not what you reported after deductions.
You need organized records from the past 12-24 months. This works well for consultants, freelancers, and contractors with straightforward billing.
Credit minimums start around 620. Down payments typically run 10-20% depending on your full profile and property type in Plumas County.
Bank statement loans analyze deposits in your personal or business accounts. Lenders calculate income from 12 or 24 months of statements.
This option works when you write off significant expenses or commingle funds. Real estate agents, restaurant owners, and gig workers often fit here.
Credit requirements mirror 1099 loans at 620+. Down payments range 10-25% based on how much income the statements show and property use.
Documentation splits these programs. 1099 loans need forms from multiple clients showing what they paid you. Bank statement loans need consistent deposit history.
Income calculation varies significantly. 1099 lenders add up your forms. Bank statement lenders apply multipliers to average deposits, often adding 25-50% back for business expenses.
Bank statement loans cost slightly more. Rates typically run 0.25-0.75% higher than 1099 loans because the income verification involves more lender risk.
Choose 1099 loans if you invoice clients directly and keep clear business records. This path offers better rates when your 1099s accurately reflect your income.
Pick bank statement loans if you write off most revenue or can't produce enough 1099 forms. This matters in Portola where many self-employed buyers run small operations with significant deductions.
Some borrowers qualify for both. We run scenarios with multiple lenders to find which method shows higher income and gets better terms for your situation.
No, lenders use one method per file. We choose whichever shows more qualifying income and gets you better loan terms.
Yes, both programs allow second homes and investment properties. Expect higher down payments, typically 20-30% for non-primary residences.
Add 5-10 days for income analysis. Total timeline runs 30-45 days versus 21-30 for conventional financing.
Bank statement loans handle this better. They capture all deposits regardless of source, while 1099 loans only count contract income.
Yes, you can refinance anytime. Many borrowers switch to conventional after two years of tax returns showing consistent income.