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If you are a self-employed professional and looking for a home loan program to fulfill your dream of having your own home. Then, a bank statement home loan will be the perfect choice for you. While conventional home loans need two years of tax returns, pay stubs, and W2s, bank statement loans need only bank statements to get approval.
There are several lenders who offer bank statement home loans in Houston. But before you apply for this loan program, you could have a few questions.
Here, we have listed down a few for you –
Who can qualify for bank statement home loans?
Any type of self-employed person can qualify for this home loan program, including entrepreneurs, business owners, gig workers, freelancers, contractors, and many other types of self-employed professionals. In case you are not sure about whether you can qualify for this mortgage loan program or not, search online or get in touch with a mortgage lender and ask them about this.
What are the perks of this home loan program?
This loan program comes with a wide array of advantages. With this loan, the mortgage lender will not look at your tax returns or the tax transcripts. Your income statements are made up of regular monthly income deposits. Besides, you can get the loan for as little as 10% down and do a cash-out refinance loan of up to 85% of the value of your property. Moreover, you can borrow up to $5 million. And typically, bank statement lenders will accept debt to income ratio of a maximum of 55 percent.
What bank statements do I need to show for this?
For getting the approval for a bank statement home loan, you need to show at least 12 months of bank statement, but it is better if you can show 24 months as they could help you get a lower mortgage rate. An experienced lender can help you determine whether you should use your business bank statements or your personal statements. This is why it is important to work with a lender who has experience in working with self-employed borrowers. As it is not a traditional loan, not all lenders will offer it. So, be careful when choosing a lender.
How will one’s income be calculated?
Income is calculated is a few different ways. If you provide a personal bank statement, 100% of the business-related deposits will be used. In case, you are using business bank statements, you can expect either 50% of the business related-deposits or more than that if a CPA letter and profit and loss statement ties to the bank statement period.
As you get the answers to most of your questions, now, start looking for a lender and apply for the loan today.