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in Vallejo, CA
Self-employed borrowers in Vallejo face a common problem: your actual income doesn't match what your tax returns show. Both 1099 loans and bank statement loans solve this, but they verify income differently.
The right choice depends on how you get paid and what your bank deposits look like. One uses your 1099 forms as proof of earnings. The other looks at 12-24 months of actual deposits hitting your account.
1099 loans use your contractor earnings statements to qualify you. If you receive 1099-MISC or 1099-NEC forms, lenders calculate your income from those documents plus any tax returns you file.
This works well for contractors who keep business expenses low. Lenders typically want to see two years of 1099 income in the same field. You'll need at least 620 credit and 10-15% down for most properties.
Bank statement loans ignore tax returns entirely. Lenders analyze 12 or 24 months of business or personal bank deposits to calculate your qualifying income. They average your deposits and apply a percentage based on your business type.
This approach works for borrowers who write off heavy expenses or mix business and personal funds. You'll see better qualification when deposits are consistent. Most programs require 15-20% down and 640+ credit for Vallejo properties.
Documentation is the main split. 1099 loans need your contractor forms and tax returns. Bank statement loans only want statements showing deposits. If your 1099s don't reflect your actual cash flow, bank statements usually qualify you for more.
Down payment requirements differ slightly. Bank statement loans typically ask for 15-20% down because they're viewed as higher risk. 1099 loans can sometimes close with 10-15% down when credit is strong. Both are non-QM products with rates 1-2% higher than conventional.
Choose 1099 loans if you're a contractor with clean, consistent 1099 income and minimal expense deductions. This route is simpler when your forms accurately reflect what you earn. It works for tech contractors, consultants, and gig workers with stable clients.
Pick bank statement loans if you write off significant business expenses or your 1099s understate your actual earnings. This matters for Vallejo business owners who run expenses through their accounts or real estate agents with high overhead. Bank statements capture deposits that tax returns miss.
No, lenders use one income verification method per loan. You choose which documentation shows stronger qualifying income before applying.
1099 loans typically close faster because they require fewer statements. Bank statement underwriting takes longer due to deposit analysis across 12-24 months.
Yes, both programs finance investment properties. Expect higher rates and 20-25% down when the property isn't your primary residence.
Lenders average your two-year 1099 income. Large drops year-over-year hurt qualification. Bank statements handle variable income better if deposits stay consistent.
Most bank statement programs accept either personal or business accounts. Mixing both requires separate income calculations that may reduce your qualifying amount.