Loading
in Menlo Park, CA
Self-employed professionals in Menlo Park often face challenges qualifying for traditional mortgages. Both 1099 loans and bank statement loans offer alternative paths to homeownership without requiring W-2s or tax returns.
These non-QM options serve the Bay Area's thriving entrepreneurial community. Each uses different documentation to verify your income and ability to repay.
1099 loans verify income using your 1099 forms from clients and customers. Lenders typically review one to two years of 1099 documentation to calculate your qualifying income.
This option works best for independent contractors who receive consistent 1099s. The process is straightforward if you maintain organized records of your contract work.
Your 1099 income gets averaged over the review period. Lenders apply standard debt-to-income calculations once your income is established.
Bank statement loans use 12 to 24 months of personal or business bank statements instead of tax documents. Lenders analyze deposits to determine your monthly income.
This approach benefits business owners who write off significant expenses. Your gross deposits matter more than net income shown on tax returns.
Underwriters review statements for consistency and sustainability. They calculate income by averaging deposits and may apply percentage reductions for business expenses.
The main difference lies in documentation source. 1099 loans rely on forms from your clients, while bank statement loans examine your actual cash flow through deposits.
Bank statement loans often qualify borrowers for higher amounts because they capture gross income. 1099 loans show net income after any business expenses you deducted.
Processing timelines vary slightly. 1099 loans move faster when forms are organized. Bank statement loans require more detailed deposit analysis but may reveal stronger income.
Choose 1099 loans if you work as an independent contractor receiving most income via 1099 forms. This path offers straightforward verification when your forms are complete and consistent.
Bank statement loans make sense for business owners with significant write-offs or multiple income streams. You benefit most when your deposits substantially exceed reported net income.
Some Menlo Park borrowers qualify under both programs. Working with an experienced broker helps you determine which approach maximizes your buying power. Rates vary by borrower profile and market conditions.
You typically choose one program or the other. Some lenders may review both to determine which qualifies you for better terms. Your broker can analyze both approaches and recommend the strongest option.
Most non-QM programs require 10-20% down, though some allow as little as 10% for strong borrowers. Your specific down payment depends on credit score, loan amount, and property type.
Expect 30-45 days for either option. Bank statement loans may take slightly longer due to detailed deposit analysis. Having organized documentation ready speeds up the process considerably.
For 1099 loans, yes—your net income after expenses is what counts. Bank statement loans examine gross deposits, which can qualify you for more when you have substantial business deductions.
Rates on non-QM loans are typically 0.5-2% higher than conventional options. Your specific rate depends on credit score, down payment, and loan amount. Rates vary by borrower profile and market conditions.