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in San Bernardino, CA
Self-employed borrowers in San Bernardino have unique mortgage options. Traditional lenders often struggle to verify income for freelancers and contractors.
Both 1099 Loans and Bank Statement Loans are non-QM products designed for self-employed buyers. They offer alternative ways to prove income without W-2 forms. Each loan type uses different documentation methods.
Choosing the right option depends on how you receive income and what records you keep. Understanding these differences helps San Bernardino borrowers get approved faster.
1099 Loans help independent contractors and freelancers who earn 1099 income. This option uses your 1099 forms to verify earnings instead of traditional pay stubs.
Lenders review your 1099 tax documents from clients and businesses that paid you. This works well if you receive most income through 1099 reporting. Rates vary by borrower profile and market conditions.
You need organized tax records showing consistent 1099 income. Most lenders require one to two years of documentation.
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 extensive 1099 documentation.
Lenders analyze deposits in your business or personal accounts. They calculate average monthly income from your statements. This flexibility helps borrowers with varied income sources.
Rates vary by borrower profile and market conditions. You avoid complex tax return analysis in many cases.
The main difference is documentation type. 1099 Loans require formal tax documents from clients. Bank Statement Loans rely on actual deposits shown in your accounts.
1099 Loans work best when you have clear contractor relationships and proper forms. Bank Statement Loans suit borrowers with cash businesses or multiple income streams. Both avoid traditional employment verification.
Processing times and requirements vary between lenders. Bank Statement Loans often provide more flexibility for complex income situations. 1099 Loans offer straightforward verification when documentation is organized.
Choose 1099 Loans if you receive most income through reported contractor work. Your clients provide annual 1099 forms and your records are organized. This path is straightforward when documentation is clean.
Bank Statement Loans fit better if your income comes from varied sources. You might operate a cash-heavy business or lack complete 1099 records. This option works when bank deposits tell your income story better than tax forms.
San Bernardino borrowers should consider their record-keeping habits. Discuss both options with a mortgage broker who understands self-employment income. The right choice depends on your specific situation.
Yes, many self-employed borrowers qualify for both options. A mortgage broker can help you choose which provides better terms based on your documentation and financial profile.
Rates vary by borrower profile and market conditions. Neither loan type consistently offers lower rates. Your credit score, down payment, and documentation quality affect pricing more than loan type.
Both typically take 30-45 days to close. Bank Statement Loans may require additional time for statement analysis. Having organized documentation ready speeds up either process.
No, but credit requirements exist for both. Most lenders want scores above 620 for non-QM loans. Higher scores improve your rate and terms regardless of which option you choose.
Down payments are similar for both loan types, typically 10-20%. Your specific requirement depends on the lender, property type, and your overall financial profile rather than the income verification method.