Question 1

Can I use both 1099 and bank statement documentation together?

Accepted Answer

Some lenders allow hybrid approaches, but most programs use one method or the other. Your loan officer will determine which documentation provides the strongest application for your situation.

Question 2

Do these loans have higher interest rates than conventional mortgages?

Accepted Answer

Non-QM loans typically carry slightly higher rates than conventional financing due to flexible underwriting. Rates vary by borrower profile and market conditions, with strong credit scores receiving better pricing.

Question 3

How long does underwriting take for self-employed borrowers?

Accepted Answer

Both loan types typically take 30-45 days to close. Bank statement loans may require additional review time if your deposits show irregular patterns or multiple income sources.

Question 4

What credit score do I need for these programs in East Palo Alto?

Accepted Answer

Most non-QM lenders require minimum credit scores of 620-680. Higher scores generally qualify for better rates and lower down payment requirements.

Question 5

Can I refinance with these loan types later?

Accepted Answer

Yes, both 1099 and bank statement loans are standard mortgages that can be refinanced. Many borrowers later refinance into conventional loans once they have two years of consistent tax returns.

1099 Loans vs Bank Statement Loans: Which Works Best for East Palo Alto Self-Employed Buyers?