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in Tulare, CA
Tulare's self-employed borrowers have two solid non-QM paths to homeownership. Both skip tax returns, but they verify income differently.
1099 loans work from your contractor statements. Bank statement loans pull from your deposit history. Your business structure determines which one closes faster.
1099 loans qualify you based on contractor income statements. If you get paid via 1099 forms, lenders average those amounts to calculate what you can borrow.
This works best when your 1099 income is consistent and you claim most business expenses on Schedule C. Lenders typically want 12-24 months of 1099 history.
Rates run 1-2% above conventional loans. Credit scores usually need to hit 620 minimum, though 640+ gets better pricing.
Bank statement loans qualify you from deposit patterns. Lenders review 12-24 months of business or personal bank statements to calculate average monthly income.
This method captures all revenue before expenses. It works for borrowers with complex income streams or those who write off significant business costs.
Rates match 1099 loans at 1-2% above conventional. Most programs accept 10-20% down depending on credit strength and deposit consistency.
The core split is documentation method. 1099 loans need contractor payment forms. Bank statement loans need deposit records from your checking account.
Income calculation differs too. 1099s show what clients paid you. Bank statements show what actually hit your account, which might include multiple sources.
Bank statements work better if you have expenses that reduce taxable income but don't affect cash flow. 1099s work better if your forms already show strong, clean income.
Choose 1099 loans if most income arrives via contractor payments and those forms reflect your true earning power. This path is simpler when you don't write off heavy expenses.
Go with bank statement loans if you have multiple income sources, significant business deductions, or irregular payment timing. This option gives lenders a fuller picture of cash flow.
Both programs work in Tulare for self-employed borrowers shut out by conventional underwriting. The right choice depends on how your business income flows and what documentation tells the clearest story.
Some lenders blend both, but most programs pick one method. Using bank statements alone usually gives you the most borrowing power if you have solid deposits.
Both typically start at 10-20% down versus 3-5% conventional. Larger down payments can offset higher rates and improve approval odds.
They average total deposits over 12-24 months, then apply an expense factor. Self-employed borrowers usually see 50-75% of deposits counted as income.
1099 loans often move quicker if your forms are organized. Bank statement loans take longer when underwriters need to analyze complex deposit patterns.
Most non-QM lenders want 12-24 months minimum. Some accept shorter histories with larger down payments or strong credit, but it's case-by-case.