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in Norco, CA
Self-employed borrowers in Norco face unique challenges when applying for mortgages. Traditional lenders require W-2 income, leaving many independent contractors and business owners searching for alternatives.
Both 1099 loans and bank statement loans serve self-employed borrowers in Riverside County. Each program uses different documentation to verify your income. Understanding these differences helps you choose the right financing path.
Rates vary by borrower profile and market conditions. Working with a knowledgeable mortgage broker ensures you get the program that matches your documentation and financial situation.
1099 loans provide mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages. These loans focus on your 1099 forms as proof of earnings.
This non-QM option works well if you receive most income through 1099 forms from clients. Lenders review your 1099 documentation from the past one to two years. Less emphasis is placed on traditional tax returns.
You'll need organized 1099 forms showing consistent income streams. This program suits contractors with straightforward 1099 income without complex business deductions.
Bank statement loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. This non-QM option analyzes deposits in your business or personal accounts.
Lenders calculate your income by reviewing monthly deposits and averaging them over the statement period. Business expenses that reduce taxable income don't hurt your qualifying income as much.
This program works especially well for business owners who write off significant expenses. Your actual cash flow matters more than what appears on tax returns.
The main difference lies in documentation. 1099 loans require 1099 forms from clients, while bank statement loans need your actual bank statements. Each program calculates qualifying income differently.
Bank statement loans benefit business owners with many deductions that lower taxable income. The lender sees your gross deposits, not just net profit. 1099 loans work better for contractors without complex business structures.
Processing times and requirements vary between programs. Bank statement loans may require more detailed explanations of large deposits. 1099 loans offer simpler documentation if you have clean 1099 income.
Choose 1099 loans if you're an independent contractor receiving most income via 1099 forms. This works best when you have minimal business expenses and straightforward earnings from clients.
Bank statement loans make sense for business owners with significant tax deductions. If your tax returns show low income but your bank deposits tell a different story, this option reveals your true earning power.
Consider your documentation availability too. Can you easily provide 24 months of bank statements or organized 1099 forms? Your answer helps determine which program offers the smoother path to approval in Norco.
Yes, many self-employed borrowers qualify for both programs. Your broker will recommend the option that shows your income most favorably and requires easier documentation for your situation.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment, and overall financial strength matter more than the specific program type.
1099 loans typically need 12-24 months of 1099 forms and possibly a CPA letter. Bank statement loans require 12-24 months of personal or business bank statements.
Yes, both 1099 and bank statement loans can finance investment properties in Norco. Requirements may be stricter, including larger down payments for non-owner-occupied homes.
Most lenders require minimum credit scores between 600-660 for both programs. Higher scores unlock better rates and terms regardless of which option you choose.