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in Ripon, CA
Self-employed borrowers in Ripon face a choice between two main non-QM paths. Both skip W-2s, but they verify income differently.
1099 loans work for contractors with clear 1099 forms. Bank statement loans fit business owners who mix personal and business deposits.
Your choice depends on how you receive income and what paper trail you have. Most Ripon self-employed borrowers qualify for one but not both.
1099 loans use your 1099 forms to prove income. Lenders average two years of 1099 earnings to calculate qualifying income.
This works best for contractors who get clean 1099s from clients. You need consistent 1099 income without major year-to-year swings.
Most lenders want 620+ credit and 15-20% down. Rates run 1-2% higher than conventional loans because of self-employment risk.
The paperwork is straightforward if you have your 1099s organized. Underwriting typically takes 3-4 weeks once documents are submitted.
Bank statement loans use 12-24 months of business or personal bank deposits. Lenders apply a percentage to your deposits to estimate income.
This fits business owners who receive payments via check, ACH, or credit card processing. You don't need formal 1099s from every client.
Expect 640+ credit and 15-25% down depending on deposit consistency. Rates match or slightly exceed 1099 loan pricing.
You'll provide statements showing regular deposits. Lenders filter out transfers between your own accounts and one-time deposits.
Documentation is the main split. 1099 loans need tax forms from clients. Bank statement loans just need your actual bank records.
Income calculation differs too. 1099 loans use reported gross income. Bank statement loans estimate income from deposit patterns.
Credit standards are slightly stricter for bank statement loans. That extra 20 points matters for borderline credit profiles.
Ripon borrowers with S-corps or LLCs usually default to bank statement loans. Independent contractors lean toward 1099 loans.
Pick 1099 loans if you get clean 1099 forms from most clients. Your income is already documented and you file Schedule C annually.
Choose bank statement loans if income flows through business accounts or you work with multiple small clients. This path works when 1099s are messy or incomplete.
Ripon real estate agents, contractors with general contractor licenses, and IT consultants typically use 1099 loans. Local business owners with retail or service operations lean bank statement.
Talk to a broker before gathering documents. We'll review one month of statements or your last two 1099s and tell you which path qualifies you for better terms.
No, lenders pick one income verification method per loan. Mixing documentation types creates underwriting complications that delay approval.
Rates are nearly identical between programs. Your credit score and down payment matter more than which non-QM program you choose.
Yes, both programs require at least 24 months of self-employment income. Lenders want proof your business is stable and ongoing.
Lenders average deposits over 12-24 months to smooth out seasonality. Consistent average monthly deposits matter more than month-to-month swings.
Yes, but it restarts underwriting from scratch. Get clear direction upfront to avoid delays and duplicate document requests.