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in Lemon Grove, CA
Most Lemon Grove self-employed buyers get rejected by conventional lenders. Their tax returns show too little income after write-offs.
Two non-QM options solve this. Both skip W-2s entirely. Knowing which fits your income type saves time and money.
A 1099 loan uses your 1099 forms to prove income. No bank statements, no tax returns, no pay stubs.
This works best for contractors and freelancers with consistent clients. Your 1099s do the heavy lifting.
Bank statement loans use 12 to 24 months of deposits to calculate income. Lenders average your monthly cash flow.
This works for business owners whose income doesn't come from clients issuing 1099s. Deposits prove what you actually earn.
The core difference is documentation. 1099 loans need your tax forms. Bank statement loans need your deposit history.
Business owners who write off heavy expenses often qualify for more with bank statements. Your gross deposits show higher income than your 1099s might.
If you're a freelancer or contractor with clear 1099 income and few write-offs, the 1099 loan is simpler and faster.
If you own a business with high gross revenue but heavy deductions, bank statement loans will likely show stronger qualifying income.
Most lenders require one method or the other. Your broker picks the one that shows the highest qualifying income.
Non-QM loans carry higher rates than conventional loans. Rates vary by borrower profile and market conditions.
Most non-QM lenders want at least a 620 score. Some go lower with a larger down payment.
Expect 10% to 20% down for most non-QM programs. Stronger credit and income docs can lower that requirement.
1099 loans often close faster. Fewer documents means a shorter underwriting review.
Yes. Many borrowers use non-QM to buy, then refinance conventional once they can show stronger tax return income.