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in Petaluma, CA
Both 1099 and bank statement loans serve self-employed Petaluma borrowers, but they verify income differently. One relies on tax forms, the other on deposits.
Most Sonoma County self-employed buyers choose based on how they report income. If you write off everything, bank statements usually show more qualifying income.
Both are non-QM products with similar rates and down payment requirements. The real difference is which paper trail works better for your tax strategy.
1099 loans use your actual 1099 forms to calculate qualifying income. Lenders average 12-24 months of 1099 earnings, then apply standard debt ratios.
This works well if your 1099 income is steady and you don't take aggressive deductions. Clean tax returns mean straightforward underwriting.
You'll typically need 15-20% down and a 640+ credit score. Rates run 1-2% higher than conventional loans due to non-QM pricing.
Bank statement loans analyze 12-24 months of business or personal bank deposits. Lenders calculate income based on what's hitting your account, not what you report to the IRS.
Perfect for Petaluma contractors and business owners who maximize write-offs. Your deposits show the real revenue before deductions slash your taxable income.
Same ballpark for down payment and credit—15-20% down, 640+ score. Rates are comparable to 1099 loans since both fall under non-QM guidelines.
The core split: 1099 loans use what you report to the IRS, bank statements use what actually flows through your accounts. If your Schedule C shows $60K after deductions but $150K deposits, bank statements win.
Documentation is simpler with 1099 loans—just your tax returns and 1099 forms. Bank statements require organizing months of deposits and explaining every large transfer.
Both hit similar pricing since they're non-QM products. Expect rates 1-2% above conventional regardless of which route you take. Rates vary by borrower profile and market conditions.
Go 1099 if your tax returns accurately reflect your earning power and you don't write off most of your income. Simpler underwriting, cleaner paper trail.
Choose bank statements if you're aggressive with deductions or show low taxable income. Your deposits will qualify you for far more house than your 1040 suggests.
Most Sonoma County self-employed borrowers end up in bank statement loans because they optimize for taxes. Run the numbers both ways—we'll calculate which shows higher qualifying income.
No, lenders pick one income verification method. We'll run both scenarios and recommend whichever qualifies you for more.
Yes, both handle purchases and rate-term refinances. Cash-out refinance is available but may require 20-25% equity.
1099 loans close slightly faster since tax returns are simpler to review. Bank statements need more deposit analysis and explanation letters.
CPA-prepared returns help with 1099 loans. Bank statements don't care about your P&L—only what deposits show.
Yes, but it restarts underwriting. Better to pick the right path upfront based on which shows stronger income.