Loading
in Manteca, CA
Self-employed borrowers in Manteca face a choice between two non-QM options that verify income differently. 1099 loans use tax forms to prove earnings, while bank statement loans analyze deposits over 12-24 months.
Both work for contractors, freelancers, and business owners who can't qualify through traditional W-2 verification. The right choice depends on how you take income and what shows up where.
1099 loans use your tax forms to calculate qualifying income. Lenders review your 1099s from the past two years and average the gross receipts to determine what you can borrow.
This works well if you claim most of your income on taxes and don't write off heavy expenses. Rates typically start around 7-8% depending on credit score and down payment. You'll need at least 10-15% down and a 620+ credit score.
Bank statement loans skip tax returns entirely. Lenders analyze 12 or 24 months of business or personal bank statements to calculate your average monthly deposits.
This option shines when you write off significant expenses that tank your taxable income. Lenders use 50-100% of deposits as income depending on your business type. Expect rates around 7.5-9% with 10-20% down and similar credit requirements.
The core split is tax returns versus bank deposits. 1099 loans require clean tax documentation showing strong reported income. Bank statement loans care only about cash flow, regardless of what you told the IRS.
Bank statement programs usually cost 0.5-1% more in rate because they assume higher risk. They also accept higher debt-to-income ratios since they're measuring actual deposits. 1099 loans stick closer to traditional DTI limits around 43-50%.
Go with 1099 if your tax returns reflect reality and you claim most income. It's simpler documentation and typically costs less. Choose bank statements if you write off meals, travel, home office, and vehicle expenses that crush your taxable income.
Most contractors in Manteca buying in the $400-600k range pick bank statements because their aggressive write-offs make 1099 loans impossible. The rate difference matters less than actually qualifying. Both options work with non-warrantable condos and investment properties too.
Yes. Most brokers run both scenarios upfront. If your tax returns don't support the loan amount, bank statements often solve it by showing actual cash flow.
Typically yes. Lenders want to see consistent income history. Some bank statement programs accept 12 months if you have strong reserves and credit.
About the same — 30-45 days. Bank statements need more months of statements, but 1099 loans require full tax transcripts from the IRS.
Yes on bank statement loans. Lenders prefer business accounts but will use personal if that's where deposits land. 1099 loans only care about the forms.
Bank statement loans handle this better. They average 12-24 months of deposits. 1099 loans average two years but focus on annual totals.