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in Santa Clara, CA
Santa Clara runs on self-employed income. Contractors, consultants, and freelancers power this market — and most can't qualify with W-2s alone.
Two non-QM loan types solve that problem differently. Knowing which one fits your income structure saves time and protects your rate.
1099 loans use your 1099 forms to document income. Lenders typically average one to two years of 1099 earnings to calculate qualifying income.
This works best for contractors with steady clients and clean 1099 history. If your income shows up consistently on those forms, this is a direct path.
Bank statement loans use 12 to 24 months of deposits to build your income picture. Lenders apply an expense ratio to calculate net qualifying income.
This fits business owners who write off heavily. Your tax returns may show low income — your bank statements tell the real story.
The core difference is how income gets calculated. 1099 loans use gross earnings on your forms. Bank statement loans use actual deposits, then apply an expense ratio.
That expense ratio matters. If lenders deduct 40-50% from your deposits, your qualifying income drops. 1099 loans avoid that haircut if your forms show strong numbers.
If you're a 1099 contractor who doesn't run a formal business, the 1099 loan is simpler. Fewer documents, cleaner underwriting.
If you own a business with real revenue but heavy deductions, bank statements may show more income than your 1099s. Run both scenarios before deciding.
Some lenders allow it, but most want one primary method. We find which approach produces the higher qualifying income for your file.
Most non-QM lenders want at least a 620. Stronger scores get better pricing on both 1099 and bank statement products.
Non-QM loans aren't bound by conforming limits. Loan amounts depend on your documented income and the lender's guidelines.
Non-QM rates run higher than conventional. Rates vary by borrower profile and market conditions, but the gap depends on your credit and down payment.
Most lenders require 12 months minimum. Stronger files use 24 months to smooth out deposit fluctuations and support higher income calculations.
Lenders average the two years. A big drop raises flags. Bank statements may tell a better story if deposits held steady.