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in San Juan Bautista, CA
Self-employed borrowers in San Juan Bautista have two strong non-QM options when tax returns don't show your full earning power. Both programs bypass traditional W-2 verification, but they pull income from different sources.
The right choice depends on how your business is structured and what financial records you keep. One uses your 1099 forms. The other uses your bank deposits.
1099 loans verify income using your 1099-NEC or 1099-MISC forms from clients. Lenders typically want to see 12-24 months of consistent 1099 income from multiple sources.
This program works best if you have clean 1099 records and minimal business expenses eating into your bottom line. Most lenders apply a percentage reduction to your gross 1099 income to account for taxes and costs.
Credit requirements usually start at 620, though stronger scores unlock better rates. Down payments typically range from 10-20% depending on the property and your credit profile.
Bank statement loans analyze 12 or 24 months of business or personal bank deposits to calculate your qualifying income. Lenders use deposit trends to determine what you actually earn, not what you report to the IRS.
This option shines for borrowers who write off substantial business expenses or run cash-heavy operations. Underwriters apply a percentage to your average monthly deposits, usually 50-75% depending on whether you use business or personal accounts.
Minimum credit scores typically start at 620-640. Down payments range from 10-20%, with stronger terms available at 20% down.
The core difference is documentation structure. 1099 loans need formal income reporting from clients, while bank statement loans just need consistent deposits regardless of source.
Bank statement loans give you more flexibility if your income streams are varied or if you handle significant cash transactions. 1099 loans work better if you have clean contractor relationships with documented payments.
Rates vary by borrower profile and market conditions. Bank statement loans sometimes carry slightly higher rates due to the broader income interpretation they allow.
Choose 1099 loans if you receive formal contractor payments and your 1099 income reflects what you actually take home. This works well for consultants, tech contractors, and professional freelancers with clear client relationships.
Pick bank statement loans if you write off major business expenses, handle cash transactions, or have multiple income streams that don't all generate 1099 forms. This fits retail business owners, restaurant operators, and trade contractors better.
In San Juan Bautista's smaller market, having both options matters because inventory moves quickly when it's available. Getting pre-approved with the right program means you can move fast when the right property surfaces.
Most lenders require you to choose one documentation method per loan. Some allow combining if one source covers the full income requirement.
1099 loans typically close faster because the documentation is more straightforward. Bank statement reviews take longer due to deposit analysis requirements.
Yes, both handle rural properties in San Juan Bautista and surrounding areas. Property type matters more than location for approval.
Many lenders accept 12 months if the income is consistent and sufficient. Longer history strengthens your application but isn't always required.
Yes, we can pivot to the other program if initial underwriting reveals one fits better. Having both options available helps us find approval.