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in Montclair, CA
Self-employed borrowers in Montclair have unique financing needs. Traditional mortgages require W-2 income, which many independent workers don't have.
Both 1099 loans and bank statement loans offer paths to homeownership for self-employed buyers. Each program uses different methods to verify your income and qualify you for a mortgage.
Understanding the key differences helps you choose the right option. Your income documentation and business structure will guide your decision in Montclair's San Bernardino County market.
1099 loans are designed for independent contractors and freelancers who earn 1099 income. This program uses your 1099 forms to document earnings instead of traditional W-2 wages.
These loans work well if you receive most income through 1099 forms from clients. Lenders review your 1099 documentation to calculate qualifying income and determine your mortgage amount.
Rates vary by borrower profile and market conditions. Your credit score, down payment, and income stability all affect your final loan terms and approval.
Bank statement loans use 12 to 24 months of bank statements to verify income for self-employed borrowers. Lenders analyze deposits to calculate your average monthly earnings.
This non-QM option helps business owners who write off significant expenses. Instead of tax returns showing low income, your bank statements reveal actual cash flow.
You'll need consistent deposits over the review period. Rates vary by borrower profile and market conditions, along with the strength of your bank statement history.
The main difference lies in documentation requirements. 1099 loans focus on forms from clients, while bank statement loans analyze deposit patterns over time.
Bank statement loans benefit those with heavy tax write-offs that reduce reported income. 1099 loans work better when your forms accurately reflect actual earnings without major deductions.
Both are non-QM programs with flexible guidelines. Your specific income structure determines which program showcases your finances most effectively for Montclair lenders.
Choose 1099 loans if you primarily receive contractor income through 1099 forms. This works best when your forms clearly show sufficient earnings for mortgage qualification.
Bank statement loans suit business owners who deposit revenue into business accounts. If you write off expenses that lower taxable income, bank statements reveal your true earning power.
Consider working with a Montclair mortgage broker who understands both programs. They can review your documentation and recommend the option that maximizes your buying power in San Bernardino County.
Yes, many self-employed borrowers qualify for both programs. A mortgage broker can determine which option gives you better terms based on your specific income documentation.
Rates vary by borrower profile and market conditions for both programs. Your credit score, down payment, and income documentation quality affect rates more than loan type.
Both programs typically take 30-45 days to close. Processing time depends on how quickly you provide documentation and the lender's current volume.
Non-QM loans often require 10-20% down, though requirements vary by lender. Your specific down payment depends on credit score and income strength.
Yes, both 1099 loans and bank statement loans are available for properties throughout Montclair and San Bernardino County. Property type and location don't limit access.