When are 12 months of bank statements specifically required for a 1099 Member?

The requirement for 12 months of bank statements for a 1099 member generally relates to the need to confirm the stability and reliability of their income when they are seeking a higher loan amount than their previous rent. When a member reports income on a 1099 form, this often implies they have variable or self-employed income, which can fluctuate significantly over time. Providing a full year of bank statements serves to substantiate their financial status and demonstrate a consistent income stream that justifies the increased loan amount.

The longer view provided by 12 months of bank statements allows lenders to assess the member's ability to sustain payments based on historical income data, especially if there are periods of lower income or irregular cash flow. In this context, if a member is applying for a higher amount, lenders want reassurance that they can manage that financial burden based on their income history. Therefore, the requirement for extensive documentation becomes particularly pertinent in validating the request.