When it comes to applying for a traditional home loan, it’s common to be asked for W-2s and tax returns. But what if you’re self-employed and don’t have those documents? Don’t worry, because there’s a solution available: bank statement loans.
What is a bank statement loan?
Bank statement loans are a type of non-qualified mortgage (non-QM) loan designed for borrowers with special circumstances. These loans allow you to qualify based on alternative methods, rather than the traditional income verification required for most loans.
With a bank statement loan, you don’t need to submit your tax returns, W-2s, pay stubs, or employment verification forms. Instead, you can use your personal bank accounts to prove your income and cash flow.
The program we offer is a 12-month bank statement program that uses your average monthly deposits as your monthly income for qualification purposes. This enables you to access home loans even if your tax returns don’t reflect your full income.
Who Qualifies for Bank Statement Mortgages?
Bank statement loans are particularly beneficial for self-employed individuals who may have unsteady cash flow, irregular income streams, or a large number of write-offs. Common professions that can benefit from these loans include business owners, freelancers, contractors, seasonal workers, gig workers, and realtors.
In these professions, traditional mortgage loans may be challenging to qualify for because the income on tax returns is often adjusted for deductions and business write-offs. However, bank statements can provide a more accurate representation of your full income.
bank statement loan requirements
Here are the key requirements for bank statement loans:
- Ideal for self-employed borrowers with strong monthly cash flow: Designed specifically for individuals who are self-employed and have a consistent monthly income.
- Income verification based on 12-24 months of bank statements: Instead of relying on tax returns or pay stubs, the loan qualification process considers your average monthly income over a period of 12-24 months using bank statements.
- 10% down payment or equity required: To qualify for a bank statement loan, you must have either a minimum down payment of 10% of the loan amount or existing equity in your home.
- Loan amounts up to $3,000,000: Bank statement loans provide the flexibility to borrow amounts up to $3MM, accommodating various property purchase or refinancing needs.
These requirements make bank statement loans an attractive option for self-employed individuals looking to access financing based on their actual income and financial situation.
The bottom line: A unique Loan Solution for Self-Employed Borrowers
Bank statement loans provide a perfect solution for self-employed homebuyers who face challenges with traditional loan requirements. By using your bank statements to verify your income, you can qualify for a home loan without the need for tax returns or W-2s. If you’re self-employed and looking to purchase a new home or refinance your existing mortgage, consider exploring the benefits of bank statement loans tailored to your specific circumstances.
Contact our reliable mortgage consultants today to discuss your options. Take the first step by requesting a free rate quote or filling out our convenient online loan application below to begin the pre-approval process.