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in Dinuba, CA
Both loan types serve self-employed borrowers in Dinuba who can't verify income with W-2s. The right choice depends on how you receive income and what documentation you can provide.
1099 loans work for contractors with clear 1099 forms from clients. Bank statement loans fit business owners who run expenses through their accounts and don't have clean 1099s.
Most Dinuba ag contractors and small business owners find one option significantly easier than the other based on their bookkeeping structure.
1099 loans use your 1099 forms from the past two years to calculate income. Lenders average your total 1099 income and divide by 24 months to get qualifying income.
This works best if you're an independent contractor with multiple clients who issue proper 1099 forms. Think equipment operators, licensed tradespeople, or ag consultants working for various farms.
You'll need organized 1099s and typically two years of tax returns. Credit requirements usually start at 620, though some lenders require 640 for Tulare County properties.
Bank statement loans analyze 12 to 24 months of business or personal bank deposits. Lenders look at total deposits, subtract transfers and non-income items, then calculate an average monthly income.
This fits business owners who write off significant expenses or mix business and personal funds. Many Dinuba restaurant owners, retail shops, and farming operations prefer this route.
You need consecutive bank statements with regular deposits. Lenders typically apply a percentage factor to deposits based on your business type to account for expenses that run through the account.
The fundamental split is income documentation. 1099 loans need formal tax documents from clients. Bank statement loans only need deposit records from your bank.
Interest rates run similar on both programs, typically 1-2% above conventional rates. Rates vary by borrower profile and market conditions. Down payment requirements usually start at 10-15% for either option.
Processing time differs significantly. 1099 loans move faster if your forms are organized—often 3-4 weeks to close. Bank statements take longer because underwriters manually review every deposit.
Tax return requirements vary. Some 1099 programs want full returns; others only need the 1099 forms themselves. Bank statement loans often skip tax returns entirely or only ask for one year.
Choose 1099 loans if you receive regular 1099 forms and can gather two years of them easily. This fits most independent contractors who work for established companies or farms that handle paperwork correctly.
Go with bank statement loans if you own a business with significant expenses, don't get proper 1099s, or run income through your own accounts. This works better for retail, hospitality, and owner-operated farming businesses in Dinuba.
Some borrowers qualify for both. In that case, run the numbers on each program. One lender might calculate your income more favorably depending on how deposits pattern in statements versus what 1099s show.
Some lenders allow combining income sources, but most require picking one documentation method. Choose whichever shows your income most favorably.
Rates run nearly identical between the two programs. Your credit score, down payment, and property type affect rates more than which income documentation you use.
1099 loans rarely require a license since you're a contractor. Bank statement loans may ask for a business license if using business accounts.
Most lenders want 24 months of 1099s or 12-24 months of bank statements. Longer history strengthens your application on either program.
Both programs handle income variation well since they average multiple months. Bank statement loans might work better if 1099s show big annual swings.