Can I Get a Mortgage with Bank Statements – The typical mortgage application process does not work for everyone. Submitting proof of income and employment is easier said than done for something who is self-employed or works as an independent contractor with varying income. However, this does not mean you won’t be a qualified applicant; it just means you need a different application process. This is where the bank statement loan comes in.
Can I Get a Mortgage with Bank Statements
What is a bank statement loan?
A bank statement loan is like a traditional mortgage, but approval for the loan is based on the applicant’s bank statements instead of the traditional proof of income and employment. Rather than looking at tax returns, mortgage underwriters will look at your bank statements to get a real picture of your true income. For many self-employed people, the long list of write-offs and deductions means their tax returns make their income look much lower than it really is.
How can I qualify for a bank statement loan?
Some of the qualification processes for a bank statement loan are similar to a more typical application process. Your loan officer and underwriters will look at your credit score and debt-to-income ratio just as they would in any other loan application process.
However, rather than turning in pay stubs and W-2s, for a bank statement loan you will turn in 12-24 months of bank statements to provide proof of income. This history of bank statements will show your typical income throughout a year or two, providing evidence of your income by looking at deposits into your account.
What are the pros and cons of a bank statement loan?
If you are self-employed, are a contract worker, or are a part of the gig economy, you may know that your income will allow you to afford to buy a home but be unable to prove this in the traditional ways. The primary benefit of a bank statement loan is providing a different way to show that you are able to repay your loan and can comfortably afford your monthly payments.
Another pro of a bank statement loan is that it may not require mortgage insurance (PMI), depending on your income and credit score, because the loan cannot be sold to Fannie Mae or Freddy Mac.
There are some cons to a bank statement loan, as well. They may come with a higher interest rate than a typical mortgage but can be refinanced in the future to offset this higher cost. The unique terms of a bank statement loan can also vary more than a typical mortgage because non-QM loans like a bank statement loan are not regulated the same way.
Where can I find a bank statement loan?
Not all lenders offer a bank statement loan option, but we do! Schedule a time to talk with one of our loan officers today to move forward with your home buying goals. We can walk you through the process and help you work towards your plans of becoming a homeowner in 2023. Contact us any time to get started!