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in Porterville, CA
Both 1099 loans and bank statement loans solve the same problem for Porterville self-employed borrowers: proving income without W-2s. The right choice depends on how your business runs and what documentation you can easily provide.
If you receive 1099 forms showing clean income, that route is simpler. If your income flows through business accounts with write-offs, bank statements paint a clearer picture. Most borrowers qualify for one or the other, rarely both equally.
1099 loans use your 1099 forms to verify income, typically requiring two years of forms. Lenders calculate your qualifying income by averaging what contractors and clients reported paying you.
This works well for freelancers and independent contractors who don't run expenses through their business. If your 1099s reflect your actual take-home income, this is the cleanest documentation path.
Most lenders want 12-24 months of 1099s from the same income sources. They're looking for consistency, not necessarily growth. A Porterville contractor earning steady 1099 income from 3-4 clients fits this profile perfectly.
Bank statement loans use 12 or 24 months of personal or business bank statements to document income. Lenders analyze deposits and calculate your average monthly income after filtering out transfers and non-income items.
This works for business owners who run expenses through their accounts and write off costs that reduce taxable income. The lender sees your actual cash flow before write-offs, which often shows higher qualifying income than tax returns.
You can use personal statements, business statements, or a combination. Most Porterville self-employed borrowers choose 24 months of statements because it produces more stable income calculations than 12 months.
The main split is documentation: 1099 loans need clean forms from clients, while bank statement loans need consistent deposits. If you write off significant business expenses, bank statements usually show higher qualifying income.
Credit requirements differ slightly. Most 1099 programs start at 620 credit, while bank statement loans typically require 640. Down payment minimums are similar for both, usually 10-15% depending on the lender.
Rate pricing is comparable since both are non-QM products. Bank statement loans sometimes price slightly higher due to the extra underwriting work involved in analyzing deposits. The difference is usually 0.125% to 0.25%.
Processing time matters in Porterville's market. 1099 loans close faster because the documentation is simpler to verify. Bank statement loans take 3-5 extra days for underwriters to review deposit patterns.
Choose 1099 loans if you receive regular contractor payments and don't run major expenses through your business. This fits freelancers, consultants, and gig workers who get paid directly and keep business costs low.
Pick bank statement loans if you own a business with expenses that reduce your taxable income. This works for retail owners, contractors with equipment costs, or anyone whose tax returns don't reflect actual cash flow.
Many Porterville business owners qualify for both but prefer bank statements because write-offs tanked their tax return income. Run both scenarios with actual numbers before deciding. The loan that shows higher qualifying income wins.
Some lenders allow it, but most require choosing one documentation method. Mixing them complicates underwriting and rarely improves your qualifying income.
Rates are nearly identical since both are non-QM loans. Bank statement loans sometimes add 0.125-0.25% due to extra underwriting complexity.
Yes, most programs want 24 months in the same line of work. Some bank statement lenders accept 12 months if income is strong and consistent.
Lenders average your 1099 income over 12-24 months. Seasonal variation is fine as long as the overall trend is stable or improving.
Yes, business statements work for LLCs, S-corps, and sole proprietors. Lenders adjust the income calculation based on your ownership percentage.
Bank statements usually work better because ag contractors have significant equipment and input costs. Those expenses reduce 1099 qualifying income but don't affect bank deposits.