In 2026, California 1099 rates run about 1–2% above conventional (non-QM), similar to bank statement. Credit and down payment drive most of it; many programs have no PMI. Investment properties price a bit higher. Model your payment in the calculator.
Why the premium exists
1099 loans don't meet agency (Fannie/Freddie) guidelines — they qualify you on gross 1099 income instead of tax returns — so they're held in portfolios or sold to private investors who require a premium. That's the ~1–2% over conventional. But two things soften the real cost: many 1099 programs carry no monthly mortgage insurance (unlike a low-down conventional loan), and you can typically refinance into conventional about two years later once you have the tax history — so the premium is often temporary.
What sets your rate
Credit score
The biggest single driver — every tier up lowers your rate.
Down payment / LTV
More down = lower LTV = lower rate. 10% vs 20% is a real difference.
Loan amount & property
Investment properties & larger loans can price higher.
Reserves & file strength
Strong documented reserves help.
The lender
Non-QM terms aren't standardized — shopping matters.
How to price better
| Lever | Effect on your rate |
|---|---|
| Higher credit score | Biggest reduction |
| Larger down payment | Meaningful reduction |
| Strong documented reserves | Helps |
| Primary vs investment | Primary prices lower |
| Compare specialty lenders | Competition lowers it |
1099 rate FAQs
What are the rates in 2026?
~1–2% over conventional, similar to bank statement; varies by credit & down.
Why higher?
Non-QM; qualifies on gross 1099 income, portfolio/private-investor funded.
What drives it most?
Credit score & down payment.
Is there PMI?
Often none — softening the monthly comparison vs low-down conventional.
Refinance later?
Yes — into conventional ~2 years on, as your tax history builds.
Reviewed by the licensing team at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties. Last reviewed July 2, 2026. Nothing here is tax advice.