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in Sonoma, CA
Sonoma has a large self-employed population — wine industry owners, consultants, contractors. Traditional loans often reject them. These two non-QM options exist for exactly that reason.
Both skip the W-2 requirement. But they verify income differently. Choosing the wrong one can cost you an approval.
1099 loans are built for independent contractors and freelancers. Lenders use your 1099 forms — typically one to two years — to calculate your qualifying income.
This works best when your 1099 income is consistent and clearly documented. If you write off very little and your 1099s show strong gross earnings, this path is usually cleaner.
Bank statement loans use 12 to 24 months of deposits to calculate your income. Lenders apply an expense ratio to your deposits to arrive at qualifying income.
This loan fits business owners who run revenue through a business account. It also works for self-employed borrowers whose tax returns understate what they actually earn.
The core difference is documentation. 1099 loans use IRS tax forms. Bank statement loans use actual deposit history. Neither requires tax returns for income qualification.
Bank statement loans carry more lender flexibility but often come with slightly higher rates. Rates vary by borrower profile and market conditions. The expense ratio used on deposits also varies by lender — we shop that across 200+ wholesale lenders.
If you file as a sole proprietor or single-member LLC with clean 1099 income and minimal deductions, the 1099 loan is the faster, simpler path.
If you own an S-corp or LLC, run expenses through your business, or your tax returns show low net income, bank statements will likely qualify you for more. We see this constantly with Sonoma-area business owners.
Some lenders allow combined documentation. It depends on the program. We can identify which lenders offer that flexibility for your profile.
Most non-QM loans require 10-20% down. The exact amount depends on your credit score and the lender's guidelines.
Most lenders want at least 620-640 for non-QM programs. Stronger scores unlock better rates and terms.
1099 loans often have simpler doc requirements and can move faster. Bank statement reviews take longer due to deposit analysis.
Yes. Both loan types can be used for investment properties. Expect stricter reserve requirements and higher rates on non-owner-occupied deals.
Lenders deduct an assumed expense percentage from your deposits. A lower expense ratio means more qualifying income — this varies by lender.