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in Benicia, CA
Self-employed borrowers in Benicia have two strong non-QM paths: 1099 loans and bank statement loans. Both skip traditional W-2 verification, but they pull income data from different sources.
Your choice depends on how you structure your business and what documentation you keep. Independent contractors with clean 1099s face a different process than business owners mixing personal and business accounts.
1099 loans use your 1099 forms to calculate qualifying income. Lenders typically average your 1099 income over 12-24 months, then apply your tax return deductions to arrive at net income.
This works well if you're a contractor receiving 1099s from clients and your tax returns show consistent earnings. Credit requirements usually start at 620, though better rates kick in above 680.
You'll need two years of 1099 forms and matching tax returns. Some lenders allow just one year if income is stable and increasing.
Bank statement loans calculate income directly from deposits in your personal or business accounts. Lenders review 12 or 24 months of statements, then apply a percentage factor to determine qualifying income.
This program shines when your business expenses create tax write-offs that lower your reportable income. The bank pulls from gross deposits, not net taxable income, which often means higher qualifying power.
You'll typically need 10-20% down and credit above 620. Some programs accept 12 months of statements, but 24 months usually gets better terms.
The core split is documentation source. 1099 loans require formal tax documents showing third-party verification of your income. Bank statement loans let your actual cash flow tell the story without waiting for tax season.
Income calculation differs sharply. 1099 loans factor in your business expenses per Schedule C, reducing qualifying income. Bank statements use gross deposits minus an expense factor, typically 25-50% depending on your business type.
Rates vary by borrower profile and market conditions. Bank statement loans often carry slightly higher rates because they rely on less traditional verification. Expect 0.25-0.75% difference in many cases.
Choose 1099 loans if you're an independent contractor receiving multiple 1099s with stable year-over-year income. This path works when your tax returns accurately reflect your earning power without heavy deductions eating into net income.
Pick bank statement loans if you own a business with significant write-offs or mix business and personal deposits. This matters most when your Schedule C shows lower net income than your actual cash flow supports.
Many Benicia buyers qualify for both programs. Run the numbers both ways before deciding—sometimes a 1099 loan gets better terms, other times bank statements unlock a higher purchase price.
No, lenders use one method per loan. You'll choose the documentation path that shows your income most favorably before starting underwriting.
Yes, both handle a wide loan range. Some lenders cap bank statement loans at specific amounts, but most cover typical Benicia purchase prices.
1099 loans often close slightly faster because tax documents are simpler to verify. Bank statement reviews can add 3-5 days to underwriting timelines.
Yes, but it restarts underwriting. Plan on an extra 7-10 days if you pivot from one documentation method to another.
1099 loans always need tax returns. Bank statement loans typically skip them entirely, which helps if your returns show minimal net income.
Both start around 620, though some bank statement lenders go to 600. Higher scores above 700 unlock better rates on either path.