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in Folsom, CA
Most Folsom self-employed borrowers get turned away by conventional lenders. Two non-QM options exist for them: 1099 loans and bank statement loans.
Both skip the W-2 requirement. But they qualify income very differently — and the wrong choice can cost you the deal.
1099 loans are built for independent contractors and freelancers. Lenders use your 1099 forms — not tax returns — to calculate income.
This matters because contractors often write off very little. Your 1099 income usually looks stronger than your taxable income on paper.
Bank statement loans use 12 to 24 months of deposits to verify income. Lenders apply an expense ratio to estimate your net income.
This works well for business owners with high revenue but heavy write-offs on taxes. The bank shows what the return hides.
Local decision guide
Use this comparison to weigh 1099 Loans and Bank Statement Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Folsom.
Most Folsom self-employed borrowers get turned away by conventional lenders. Two non-QM options exist for them: 1099 loans and bank statement loans.
Both skip the W-2 requirement. But they qualify income very differently — and the wrong choice can cost you the deal.
1099 loans are built for independent contractors and freelancers. Lenders use your 1099 forms — not tax returns — to calculate income.
1099 loans qualify income directly from your contractor earnings. Bank statement loans back into income through deposit history minus expenses.
Rates vary by borrower profile and market conditions. Bank statement loans often carry slightly higher rates due to the added underwriting complexity.
If you get paid on 1099s from one or more clients and don't run a formal business, the 1099 loan is cleaner and faster to close.
If you own a business, pay yourself through an LLC, or carry heavy tax deductions, bank statements will likely show more qualifying income.
Some lenders allow hybrid documentation. We shop across 200+ wholesale lenders to find programs that accept blended income.
Yes. Both 1099 and bank statement loans are available for purchases and refinances in Folsom and throughout Sacramento County.
Most lenders want 12 months minimum. A 24-month average usually produces a stronger qualifying income number.
Most non-QM lenders start at 620. Better rates and terms typically kick in at 680 and above.
Most lenders want 24 months of 1099 income in the same field. Some allow 12 months with strong compensating factors.
They're different, not harder. Non-QM lenders accept income types conventional underwriting rejects. The tradeoff is a higher rate.