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in Portola Valley, CA
Self-employed professionals in Portola Valley have two strong non-QM financing paths when traditional income documentation doesn't fit. Both 1099 loans and bank statement loans help independent contractors, freelancers, and business owners qualify without standard W-2 verification.
The right choice depends on how you receive income and what documentation shows your earnings most accurately. Understanding these differences helps you move forward with confidence in San Mateo County's competitive market.
1099 loans verify income using your 1099 tax forms from clients and customers. This works well for independent contractors who receive multiple 1099s throughout the year and whose forms accurately reflect their earnings.
Lenders typically review one to two years of 1099 documentation along with personal and business tax returns. This approach suits borrowers whose gross income on 1099 forms represents their true earning power without extensive business write-offs.
The process feels more familiar to traditional financing since lenders examine tax documentation. Rates vary by borrower profile and market conditions, with approval based on verified 1099 income patterns.
Bank statement loans analyze deposits in your personal or business bank accounts over 12 to 24 months. This method works for self-employed borrowers who take significant business deductions that reduce taxable income on returns.
Lenders examine your bank deposits to calculate monthly income, typically using a percentage of total deposits to account for business expenses. This reveals your actual cash flow rather than tax-reported income.
This option helps Portola Valley business owners whose tax returns don't reflect true earning power due to legitimate write-offs. Rates vary by borrower profile and market conditions, with stronger cash flow patterns supporting better terms.
The main distinction lies in documentation method. 1099 loans rely on tax forms showing what clients paid you, while bank statement loans examine what money actually flowed through your accounts.
1099 loans work better when your tax forms reflect your true income without major deductions. Bank statement loans shine when you maximize business write-offs that lower taxable income but still maintain strong cash flow.
Both options accept lower credit scores than conventional loans and offer flexibility for complex income situations. Neither requires traditional employment verification, making both accessible to Portola Valley's many self-employed professionals.
Choose 1099 loans if you receive most income through 1099 forms and don't take extensive business deductions. This path works when your tax returns accurately represent your earning capacity.
Select bank statement loans if business write-offs significantly reduce your taxable income but you maintain consistent deposits. This option serves borrowers whose bank accounts tell a better income story than tax returns.
Many self-employed Portola Valley residents qualify for either program. A mortgage professional can review your specific documentation to determine which approach positions you best for approval and favorable terms.
Programs typically use one documentation method, not both. A lender evaluates which approach shows your income most favorably and processes your application using that single method.
Non-QM loans often require 10-20% down, sometimes more depending on your profile. Exact requirements vary by lender, credit score, and property type in Portola Valley.
Most lenders require 12-24 months of documentation. The longer your consistent income history, the stronger your application appears to underwriters.
Yes, because 1099 loans use tax returns where deductions lower qualifying income. If you have major write-offs, bank statement loans better capture your actual earning power.
Rates vary by borrower profile and market conditions. Both fall within the non-QM range, with your credit score, down payment, and income stability affecting the final rate.