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in Santa Rosa, CA
Santa Rosa's self-employed borrowers have two strong non-QM options for proving income without W-2s. Both work well for Sonoma County's entrepreneurs, consultants, and business owners who can't qualify through conventional channels.
The right choice depends on how you receive income and what documentation you keep. 1099s work if you have clean contractor paperwork. Bank statements work if your deposits tell a clearer income story than your tax returns.
1099 loans use your contractor income forms to calculate qualifying income. Lenders review your 1099s from the past one to two years and average your earnings. You avoid the tax-return scrutiny that hurts many self-employed buyers.
This works best if you have consistent 1099 income from multiple clients. Credit requirements typically start around 620. Down payments range from 10% to 20% depending on the lender and your income stability.
Bank statement loans calculate income from 12 to 24 months of personal or business bank deposits. Underwriters analyze your deposits and apply an expense factor to determine net qualifying income. This sidesteps tax returns entirely.
This option shines for business owners who write off heavy expenses or show lower taxable income than actual cash flow. You need organized bank statements and consistent deposits. Credit scores typically start at 620, with 10% to 20% down.
The main split is documentation type. 1099 loans need your contractor forms and possibly a P&L statement. Bank statement loans need clean banking records with regular deposits. If you mix income sources or take cash payments, bank statements usually paint a better picture.
Rates vary by borrower profile and market conditions. Both programs typically price similarly since they fall under non-QM guidelines. The approval odds depend more on which documentation method shows your income most favorably.
Pick 1099 loans if you're a freelancer or consultant with clear contractor relationships and predictable 1099 income. Pick bank statement loans if you own a business with strong cash flow but aggressive tax write-offs that lower your taxable income.
Many Santa Rosa borrowers think they need conventional financing and give up when denied. These two non-QM paths get self-employed buyers approved every day. The key is matching your documentation strength to the right program.
Some lenders allow hybrid approaches, but most prefer one clear income calculation method. Mixing documentation can complicate underwriting and slow approval.
Rates vary by borrower profile and market conditions. Both programs price similarly since they're non-QM loans with comparable risk profiles.
Most lenders want at least one year, preferably two. Shorter histories may qualify with larger down payments and stronger credit.
Irregular deposits can work if the overall trend shows consistent income. Lenders average deposits over 12 or 24 months to smooth volatility.
Yes, but multiple clients strengthen your application. Single-client 1099 income looks riskier to underwriters than diversified contractor work.