Loading
in Cloverdale, CA
Both 1099 loans and bank statement loans help self-employed Cloverdale borrowers qualify without W-2s. The main difference is how lenders calculate your income.
1099 loans work from tax forms contractors already file. Bank statement loans pull income directly from deposit history, which often shows higher earnings.
1099 loans use the income reported on your 1099 tax forms to qualify you. Lenders typically average 12 to 24 months of 1099 earnings to determine what you can afford.
This works well if you claim most of your income and don't write off heavy expenses. You'll need strong 1099 documentation and usually a 620+ credit score.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits. Lenders use gross deposits before expenses, which often results in higher qualifying income than tax returns show.
This option fits self-employed borrowers who write off significant business expenses. Credit requirements start around 620, though stronger credit gets better rates.
The biggest difference is income calculation. 1099 loans use what you reported to the IRS. Bank statement loans use what hit your account, before deductions.
Bank statement loans require more documentation upfront but typically qualify you for more. 1099 loans are simpler if your tax forms already show strong income. Rates vary by borrower profile and market conditions, but both cost more than conventional loans.
Choose 1099 loans if your tax returns already show enough income to qualify. You'll have simpler documentation and faster processing since lenders just need your 1099 forms.
Pick bank statement loans if you write off 30% or more in business expenses. The gross deposit method will show lenders a much higher income than your tax return does, which means you qualify for more house in Cloverdale's competitive market.
No, lenders pick one income calculation method per loan. You'll use whichever shows higher qualifying income for your situation.
Yes, both typically need 10-20% down. Higher down payments get better rates on either program.
1099 loans often close quicker because documentation is simpler. Bank statement loans need more underwriting time to analyze deposits.
Bank statement loans handle this better since they capture all deposits. 1099 loans require separate forms for each income source.
Yes, but it restarts underwriting. Choose the right fit upfront based on how you document income.