Question 1

Can I use both 1099s and bank statements for my loan?

Accepted Answer

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.

Question 2

Do these loans require higher down payments than conventional mortgages?

Accepted Answer

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.

Question 3

How long does underwriting take for these loan types?

Accepted Answer

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.

Question 4

Will my business expenses hurt my qualifying income?

Accepted Answer

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.

Question 5

Are interest rates higher than conventional loans?

Accepted Answer

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.

1099 Loans vs Bank Statement Loans: Self-Employed Financing in Menlo Park