Bank Statement Program – Perfect for Self Employed Borrowers
A Bank statement loan is a type of home loan that doesn’t require w2s or tax returns for income verification.
It’s a loan program perfect for self-employed borrowers who can’t qualify with a traditional conventional loan or borrowers who don’t have a steady income.
Best for self employed borrowers
When you’re self-employed, you may not be able to show net income on tax returns, or provide pay stubs when you apply for a mortgage. This makes it difficult to qualify for a traditional home loan.
Our bank statement program also known as Non-Qm loan allows you to qualify without having to provide tax returns or pay stubs. We look at your bank statements to detemine what your income is.
How does a bank statement loan work?
To be eligible for the program, you will need to be self employed for at least 2 years, and be able to provide bank statements for at least the last 12 months.
- A credit score of at least 600
- Have a down payment of at least 5%
- In addition to the down payment, you must have reserves for 3 months of mortgage payments
For home buyers who are self-employed or rely on bonuses or stock options for a hefty amount of their income, this type of home loan is a great option.
What can the bank statement program be used for?
You can use the program to purchase a primary residence, a second home, or if you are an investor you can purchase investment property.
It’s also the only option for real estate investors with four or more properties. It gives them the ability to still obtain a mortgage even under special circumstances.
What are some drawbacks of a bank statement loan?
Since this type of loan is considered to be risky, there are a few drawbacks compared to the traditional mortgage.
- A bank statement loan will have a higher interest rate than a traditional loan.
- Reserves are required. Reserves is liquid assets, like cash, that you have easy access to in case you need help covering your mortgage payments. The minimum amount needed is 3 months.
- NSFs and/or overdrafts that are consistent every month could be an issue.
What are some benefits of a bank statement loan?’
There are more beneifts than drawbacks.
- For one, the program opens up doors to those who may not otherwise qualify for a home loan.
- There is no PMI, even with a 5% down payment.
- Debt to income ratio can be as high as 55%
- Credit scores can be as low as 600
- You can get a mortgage shortly after a bankruotcy discharge or a foreclosure
- There is a 40 year mortgage option, which may allow you to qualify for more than you would on a 30 year mortgage
- Interest only loan options are available
- You can get a loan up to a $4million purchase price
Don’t let business ownership prevent you from getting the house of your dreams. Look into getting our bank statement loan and stop worrying about how you can qualify for a mortgage. Apply online today.
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