Loading
in Yreka, CA
Self-employed borrowers in Yreka face a documentation choice that affects approval odds and rates. Both 1099 loans and bank statement loans skip traditional W-2 verification, but they pull income proof from different sources.
Your business structure and how you manage cash flow determine which path closes faster. Some borrowers qualify for both options and choose based on which shows stronger income.
1099 loans use your tax forms to verify income—specifically the 1099-NEC or 1099-MISC you receive from clients. Lenders review one or two years of 1099 forms plus personal tax returns to calculate qualifying income.
This works best for contractors who write off fewer expenses and show strong taxable income. If you're a consultant, IT contractor, or real estate agent with minimal deductions, your 1099s likely reflect earnings clearly.
Credit requirements typically start at 620, though higher scores unlock better rates. Most programs allow up to 90% LTV on primary homes in Siskiyou County, with slightly tighter limits on investment properties.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits to calculate income. Lenders apply expense ratios—typically 25% to 50%—to account for business costs, then use the remainder as qualifying income.
This program saves borrowers who maximize tax deductions and show low taxable income. Your bank statements reveal actual cash flow that doesn't appear on tax returns after write-offs.
Minimum credit scores run slightly higher, usually 640 or above. LTV caps match 1099 loans for owner-occupied properties, with rates varying by borrower profile and market conditions.
The core split: 1099 loans rely on what you report to the IRS, while bank statement loans track what actually flows through your accounts. If you write off 60% of your revenue, your 1099s show that reduced number but your bank statements show the full deposits.
Documentation speed differs too. 1099 loans need executed tax returns, which means waiting until you file. Bank statement loans only need statements you can pull immediately from your bank portal.
Underwriting timelines run similar—both take 3 to 4 weeks—but bank statement loans sometimes close faster because there's less back-and-forth about Schedule C deductions. Rates depend more on credit profile than program choice.
Choose 1099 loans if your tax returns already show enough income to qualify. Contractors who don't heavily leverage deductions—or those buying below their income level—usually clear underwriting easily with 1099 documentation.
Go with bank statement loans when your write-offs crush taxable income but your accounts prove strong cash flow. This includes most retail business owners, truckers with heavy equipment depreciation, and real estate investors using cost segregation.
Run both scenarios before choosing. We calculate qualifying income under each method and show you which delivers better loan terms for your Yreka purchase.
No, lenders choose one income documentation method per file. Mixing both creates underwriting conflicts, so we pick the path that shows your income strongest.
Rates depend on credit score and down payment, not documentation type. Both programs price similarly when credit profiles match.
Most lenders want two years, but some bank statement programs accept 12 months if income is strong and consistent.
Yes, but it restarts underwriting. We analyze both options upfront to avoid delays and pick the right path from the start.
Bank statement loans sometimes approve with only 12 months of deposits. 1099 loans almost always require two years of tax filings.