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in Colma, CA
Self-employed borrowers in Colma face a choice between two non-QM paths. 1099 loans use your tax forms, while bank statement loans skip the tax returns entirely.
Both work for independent contractors and business owners. The right choice depends on how you manage your tax write-offs and what shows up in your business account.
1099 loans verify income through your annual 1099 forms from clients. Lenders calculate qualifying income by averaging 12 to 24 months of 1099 earnings.
This works best if your tax returns reflect steady income without heavy write-offs. You need consistent 1099s from multiple clients or one major contract.
Credit requirements typically start at 620, with down payments from 10-20% depending on the lender. Rates run 0.5-1.5% higher than conventional loans.
Bank statement loans use 12 or 24 months of business or personal bank deposits to calculate income. Lenders apply a multiplier to your average monthly deposits.
This path works when you write off 40-60% of revenue for tax purposes. The bank doesn't care about your Schedule C—they only see what hits your account.
Most programs require 640+ credit and 15-20% down. Rates typically run 1-2% higher than conventional, with the 24-month option pricing better than 12-month.
Local decision guide
Use this comparison to weigh 1099 Loans and Bank Statement Loans through local payment fit, eligibility, documentation, and timing before choosing a path in Colma.
Self-employed borrowers in Colma face a choice between two non-QM paths. 1099 loans use your tax forms, while bank statement loans skip the tax returns entirely.
Both work for independent contractors and business owners. The right choice depends on how you manage your tax write-offs and what shows up in your business account.
1099 loans verify income through your annual 1099 forms from clients. Lenders calculate qualifying income by averaging 12 to 24 months of 1099 earnings.
The core split is documentation. 1099 loans require tax forms that match your income claims. Bank statement loans ignore taxes and base everything on deposits.
Credit standards differ slightly. 1099 programs sometimes accept 620, while most bank statement lenders want 640. Down payment requirements overlap at 15-20% for both.
Rate pricing favors 1099 loans by about 0.25-0.5% when credit and down payment match. Bank statement loans cost more because lenders take on higher documentation risk.
Choose 1099 loans if your tax returns show at least 60% of gross revenue as net income. This route gives you better rates and slightly easier credit approval.
Pick bank statement loans if you write off more than 40% for taxes. You'll pay a bit more, but you can qualify using gross deposits instead of net taxable income.
Some lenders now accept crypto holdings as reserves or additional income on non-QM loans. If you hold digital assets, mention it—it can strengthen your file even on traditional 1099 or bank statement programs.
Most lenders pick one documentation path, but some will blend sources if your income story needs it. We run both scenarios to find the best rate.
Both work. Business accounts are cleaner, but personal accounts qualify if deposits clearly show business income with minimal personal expenses mixed in.
1099 loans usually close 2-3 days faster because tax forms are simpler to verify. Bank statement underwriting takes longer to review deposit patterns.
No. Bank statement programs require 12 or 24 months minimum. If you only have six months of history, a 1099 loan is your only path.
Yes. Both 1099 and bank statement loans approve investment property purchases with 20-25% down, though rates run about 0.5% higher than owner-occupied.