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in Palm Springs, CA
Self-employed borrowers in Palm Springs have unique mortgage needs. Traditional W-2 income verification doesn't work for independent contractors and business owners.
Both 1099 Loans and Bank Statement Loans offer alternative income documentation paths. These non-QM options help self-employed buyers qualify in Riverside County.
Understanding the differences helps you choose the best financing option. Each loan type serves different types of self-employed borrowers.
1099 Loans help independent contractors and freelancers who receive 1099 forms. This program verifies income through your 1099 statements instead of W-2s.
These loans work well if you have consistent 1099 income documentation. Lenders typically review one to two years of 1099 forms to establish income.
You'll need organized records of your 1099 earnings. Clean documentation makes the approval process smoother and faster.
Bank Statement Loans use 12 to 24 months of bank statements to verify income. This non-QM option works for self-employed borrowers who may not have traditional documentation.
Lenders analyze deposits in your business or personal accounts. They calculate your average monthly income from these statements.
This approach captures income that might not show on tax returns. It's especially helpful for business owners who take legitimate write-offs.
The main difference lies in documentation requirements. 1099 Loans need specific tax forms while Bank Statement Loans rely on deposit history.
1099 Loans suit contractors with clear 1099 documentation. Bank Statement Loans benefit business owners whose bank deposits exceed reported taxable income.
Income calculation methods vary between the two programs. Bank Statement Loans may reveal higher qualifying income for borrowers with significant business deductions.
Choose 1099 Loans if you're a freelancer or contractor with organized 1099 forms. This path is straightforward when your 1099 income is well-documented and consistent.
Bank Statement Loans work better if you own a business with expenses. They're ideal when your bank deposits show more income than your tax returns reflect.
Consider your documentation situation and income reporting. A mortgage broker in Palm Springs can review your specific situation and recommend the best fit.
Yes, some borrowers qualify for both programs. A mortgage professional can compare which option gives you better terms based on your documentation.
Rates vary by borrower profile and market conditions. Your credit score, down payment, and documentation quality affect your rate more than the loan type itself.
Both typically take 30-45 days to close. The timeline depends more on how quickly you provide documentation than the specific loan program.
Down payment requirements vary by lender and your profile. Many non-QM loans require 10-20% down, though some programs accept less.
Yes, both 1099 Loans and Bank Statement Loans are available throughout Palm Springs and Riverside County. Property type and location affect eligibility.