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in Hillsborough, CA
Hillsborough's self-employed buyers need income documentation that matches how they actually get paid. Both 1099 and bank statement loans skip W-2s, but they verify earnings differently.
Your business structure determines which works better. A consultant with clean 1099s has different needs than a business owner mixing personal and business accounts.
1099 loans verify income through 1099-MISC or 1099-NEC forms from your clients. Lenders typically want two years of 1099s and matching tax returns.
This works when your 1099 income is clean and you don't write off much on Schedule C. You need a 620 credit score minimum. Most lenders allow 10-20% down depending on credit.
Bank statement loans use 12-24 months of personal or business bank deposits to calculate income. Lenders apply a percentage (typically 50-75%) to account for business expenses.
This path works when you have heavy write-offs that tank your taxable income. You need 620+ credit and 10-20% down. Some lenders now accept crypto holdings as reserves alongside traditional assets.
The core split: 1099 loans follow your tax returns while bank statements follow your actual deposits. If you show $200K in 1099s but write off $150K in expenses, a 1099 loan sees $50K income.
Bank statement loans see the $200K coming in and apply an expense factor (say 50%), giving you $100K qualifying income. Rates vary by borrower profile and market conditions, but expect similar pricing on both.
Choose 1099 loans if your tax returns already show strong income and you have consistent 1099 documentation. This works for consultants, gig workers, and contractors who don't heavily leverage deductions.
Pick bank statement loans when your business expenses crush your taxable income but cash flow is solid. This fits established business owners with healthy deposits but aggressive tax planning.
Yes, if one path shows weaker income than expected. We run both calculations upfront to pick the strongest option before you apply.
Rates run 0.5-1.5% higher than conventional, but both 1099 and bank statement programs price similarly. The income documentation drives the difference, not the rate.
Mix them. Lenders combine income sources. Use W-2 for the stable base and 1099 for upside if it strengthens your file.
Two years for 1099s. Bank statements need 12-24 months depending on the lender and how strong the income trend looks.
Absolutely. Business statements work as long as you're the owner. Some lenders prefer them since they show pure business cash flow.