Loading
in Fontana, CA
Self-employed borrowers in Fontana have unique mortgage options. Traditional lenders often struggle to verify income for freelancers and independent contractors.
Both 1099 Loans and Bank Statement Loans offer non-QM solutions in San Bernardino County. Each uses different methods to prove your income. Understanding which fits your situation can save time and improve approval chances.
1099 Loans are designed for independent contractors and freelancers who receive 1099 income. These mortgages verify earnings through your 1099 forms instead of W-2 wages.
Lenders typically review 12 to 24 months of 1099 statements. This approach works well if you have consistent contractor relationships. Your tax returns may also be part of the review process.
Bank Statement Loans use 12 to 24 months of personal or business bank statements to verify income. This non-QM option serves self-employed borrowers in Fontana who may not have traditional documentation.
Lenders analyze deposits to calculate your average monthly income. This method works for business owners with multiple income streams. It captures the full picture of your cash flow without relying on tax returns alone.
The main difference lies in documentation type. 1099 Loans require specific contractor forms from clients. Bank Statement Loans rely on actual deposit patterns in your accounts.
1099 Loans suit borrowers with clear contractor relationships and organized 1099 records. Bank Statement Loans work better if you run a business with mixed revenue sources. Your business structure often determines which option fits best.
Both are non-QM products available in San Bernardino County. Rates vary by borrower profile and market conditions. Your lender will evaluate credit score, down payment, and overall financial strength for either option.
Choose 1099 Loans if you work as an independent contractor with steady clients. This option requires organized 1099 forms but offers straightforward income verification.
Bank Statement Loans make sense for business owners with complex income streams. If you have multiple revenue sources or write off significant expenses, bank statements show your true cash flow.
A Fontana mortgage broker can review your specific situation. They can determine which documentation you have available and which loan type offers better terms for your profile.
Most lenders prefer two years of self-employment history. Some may accept one year with strong compensating factors like excellent credit or larger down payment.
Rates vary by borrower profile and market conditions. Neither loan inherently offers better rates. Your credit score, down payment, and documentation quality determine pricing.
Not required, but helpful. A CPA can organize your documentation properly. Bank Statement Loans often need a CPA letter explaining income calculations.
Some lenders allow hybrid approaches. Your broker can structure the application using whichever documentation presents your income most favorably.
Down payments typically range from 10-20% for both loan types. Your specific requirement depends on credit score and property type rather than loan category.