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Bank Statement Loans – A Loan for Borrowers Without Standard Income
If you don’t have ‘regular’ income you might find it hard to get mortgage approval. Traditional lenders want pay stubs and W-2s, and possibly even tax returns. If you don’t have those documents or your tax returns show a loss, you’ll find yourself without the mortgage approval you need.
Bank statement loans, however, are a solution to the problem. While they went away for a bit during the housing crisis, they are back and better than ever.
What are Bank Statement Loans?
Bank statement loans offer the option to prove your income without using pay stubs, W-2s, or tax returns. Let’s say you own your own business, for example. If you take all the deductions you’re eligible for, you might show a loss.
When a traditional lender looks at that, they have to turn down your application because you don’t show any income. With a bank statement loan, though, you can prove your income and that you can afford the loan without worrying about what you claimed on your tax returns.
What we Look for in Bank Statement Loans
Like any loan, there are certain factors we need satisfied to approve you for the loan. This includes:
- Proof of stable income using up to 24 months of bank statements
- An average credit score (proof that you can at least manage your finances)
- Proof you have liquid assets for the down payment
- Proof you have liquid assets beyond what you’ll use for the down payment
Ideally, you’ll prove you have the income to afford the loan. We’ll also make sure the home is worth at least as much as you’re borrowing to ensure there’s enough collateral in the loan.
Who Should Use Bank Statement Loans?
Bank statement loans are great for many borrowers, not just the self-employed. Anyone with irregular income or who has the advantage of a large number of tax write-offs that reduces their taxable income and their ability to get approved for a mortgage is a good candidate.
This includes:
- Freelancers
- Consultants
- Real estate investors
- Real estate agents
- Business owners
The Benefits of Bank Statement Loans
If you are eligible for a traditional mortgage loan, bank statement loans offer many options including:
- Looser credit score requirements
- Allows higher debt-to-income ratios
- You can qualify without any income documents
- You can borrow high loan limits
Final Thoughts
If you need a mortgage and have been turned down by regular mortgage lenders, consider a bank statement loan. You’ll still get competitive interest rates and fees without the hassle of extensive documentation and underwriting requirements.
At Save Financial, we work with many lenders that offer loans for people with irregular income. Stop worrying about being turned down for a mortgage and get the approval you need! A bank statement loan could be the answer to your financing needs, giving you the funds you need to buy a home faster than you thought possible! Contact us today to learn more.
