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in Lodi, CA
If you're self-employed in Lodi, traditional mortgage underwriting isn't built for how you earn. Both 1099 loans and bank statement loans skip tax returns, but they verify income in completely different ways.
The right choice depends on how your business is structured and what your financials look like. One prioritizes clean 1099 forms, the other reads bank deposits.
1099 loans use your 1099-MISC or 1099-NEC forms to prove income. Lenders calculate an average from 12 to 24 months of 1099s, then use that number to qualify you.
This works best if you're a contractor or freelancer with consistent 1099 income and minimal business expenses. The cleaner your 1099 documentation, the smoother your approval.
Most programs require 10-20% down and credit scores above 620. Rates run higher than conventional loans but lower than most bank statement programs.
Bank statement loans analyze 12 to 24 months of personal or business bank deposits. Underwriters calculate your average monthly income from those statements, often applying an expense factor.
This program fits self-employed borrowers who write off significant expenses or run income through an LLC or S-corp. You don't need clean 1099s or tax returns showing high income.
Expect 10-20% down minimums and credit scores starting at 620. Rates vary by borrower profile and market conditions but tend to run higher than 1099 loans due to increased underwriting complexity.
The biggest difference is documentation. 1099 loans need formal tax documents showing contractor income. Bank statement loans need months of deposit history, which gives more flexibility but adds complexity.
If you write off half your income on Schedule C, 1099 loans won't work because your actual 1099 forms show high revenue. Bank statement loans ignore those deductions and focus on cash flow.
Rates and fees also differ. 1099 loans typically price 0.5-1% lower because the income verification is simpler. Bank statement loans cost more to underwrite, so lenders charge accordingly.
Choose 1099 loans if you're a contractor or freelancer with straightforward income and few business deductions. This path offers cleaner documentation and better pricing.
Go with bank statement loans if you run a business with employees, significant expenses, or income channeled through an entity. Your tax returns probably understate your actual cash flow.
For Lodi buyers working in agriculture, logistics, or tech consulting, we see both programs work depending on business structure. The key is matching your documentation to what underwriters actually need.
No, lenders use one income verification method per loan. You'll choose the program that best matches your documentation and business structure.
1099 loans typically price 0.5-1% lower than bank statement loans. Rates vary by borrower profile and market conditions.
Most programs want 12-24 months of documentation. Some lenders accept 12 months if your income is stable and well-documented.
Yes, bank statement loans accept business accounts. This works well if you run income through an LLC or S-corp.
Both programs typically start at 620 minimum. Higher scores unlock better rates and lower down payment requirements.