Loading
in Windsor, CA
Self-employed borrowers in Windsor have two strong non-QM paths: 1099 loans and bank statement loans. Both bypass traditional tax returns, but they verify income differently.
Choosing the right program depends on how you structure your business income. Some Windsor contractors fit one program better than the other based on their 1099 forms and deposit patterns.
These aren't exotic products—they're standard tools for self-employed borrowers who write off significant business expenses. Most lenders price them within 0.5% to 1.5% of conventional rates.
1099 loans use your 1099-MISC or 1099-NEC forms to prove income. Lenders pull the numbers directly from those forms without adjusting for write-offs or deductions.
This works best for contractors who receive clean 1099s showing most of their income. You'll need 12 to 24 months of forms from the same clients or industry.
Credit minimums usually start at 620, though stronger files get better pricing. Most programs allow up to 90% LTV on Windsor purchases with mortgage insurance.
Bank statement loans calculate income from 12 or 24 months of business or personal bank deposits. Lenders average your deposits and apply an expense ratio—typically 25% to 50%.
This option suits borrowers with messy 1099 documentation or those paid via direct deposit, checks, and cash. Your deposit history matters more than tax filings.
Expect credit minimums around 620 to 640 depending on the lender. LTV caps usually hit 90% with mortgage insurance, though some lenders stop at 85%.
The biggest split is documentation. 1099 loans need clean forms from consistent clients. Bank statement loans need steady deposits but don't care about the format.
Income calculation differs sharply. 1099 programs use gross income from forms. Bank statement lenders deduct 25% to 50% for business expenses before qualifying you.
If your 1099s show $120k but you only deposit $80k after expenses, the 1099 loan qualifies you higher. If you get paid in mixed formats or have irregular 1099s, bank statements win.
Pricing usually favors 1099 loans by 0.25% to 0.5% when files are clean. Bank statement loans charge slightly more because the income calculation involves more lender risk.
Choose 1099 loans if you get most income from a few consistent clients who issue clean forms. This path gives you higher qualifying income and slightly better rates.
Choose bank statement loans if your 1099s are scattered, you mix client types, or you receive payments via multiple methods. The flexibility offsets the expense ratio hit.
For Windsor borrowers with both options, run the numbers both ways. A $10k difference in qualifying income can matter more than a 0.25% rate difference on a $600k loan.
Most brokers can submit your file through either program. The right choice depends on which documentation tells the stronger income story for your specific business structure.
No, lenders pick one income calculation method per loan. You'll submit documents for both, but underwriting uses only one program's guidelines.
Yes, but cash-out LTVs drop to 75% to 80% depending on credit and loan size. Purchase loans allow higher leverage than refinances.
1099 loans close slightly faster because income calculation is simpler. Bank statement underwriting adds 3 to 5 days for deposit analysis.
Yes, brokers often pivot between programs during underwriting. Submitting both document sets upfront speeds up any switch.
Most lenders want 6 to 12 months of reserves for non-QM loans. Higher loan amounts and lower credit scores push reserve requirements toward 12 months.