This ARTICLE On Bank Statement Deposit Only Mortgage For Self-Employed Borrowers Without Income Tax Returns Was PUBLISHED On January 3rd, 2020
- Since the real estate crash of 2008, the United States Federal Government stepped in to create mortgage guidelines and standards
- One of the added rules required income calculations used for borrowers, including self-employed borrowers
- This is part of the ABILITY TO REPAY ACT
- Depending on how you file your taxes, the write-offs you take may lower your mortgage qualifications
- We receive calls almost every day from self-employed borrowers who are finding it difficult to qualify for the home they would like to buy
In this article, we will cover and discuss Bank Statement Deposit Only Mortgage For Self-Employed Borrowers.
Bank Statement Deposit Only Mortgage With No Income Tax Returns Required
Filing tax returns as a self-employed borrower can be a catch 22. If you do not take write-offs, you owe more in income taxes. If you don’t take write-offs, you will qualify for less when it comes to applying for a mortgage.
- If you cannot qualify for the property you’re looking for based on your income taxes, you may want to utilize a bench statement loan
- A bank statement loan is a great alternative and does not require your federal income tax returns
- Tax returns are NOT part of the transaction
- Your income will be calculated off of your bank statements
- The Underwriter will count all business-related deposits and typically use 50% of that number as your monthly income
They will either use a 12 or 24 months average, depending on your credit score and type of bank statement, business or personal.
Key Features Of The Bank Statement Deposit Only Mortgage Program
Key features of the bank statement loan:
- Available with credit scores as low as 600
- As low as 10% down payment permitted
- Competitive rates – call for an exact quote from a licensed loan officer
- No reserve requirement (depending on credit score)
- 30 year fixed or adjustable rates mortgages available
- The minimum loan amount is $150,000 (exceptions sometimes granted)
- 1 mortgage late payment allowed in past 12 months (NO rolling late payments)
Starting The Mortgage Qualification And Application Process
How to apply for a bank statement loan:
Applying for a bank statement loan is very similar to applying for your everyday mortgage product. You will fill out the same application so your loan officer can verify your credit report. From there you will send in the following documentation:
- Last 12 or 24 Months Bank Statements (all pages)– to source down payment and calculate income
- Driver’s License
Once you have completed the application and sent in the documentation, an underwriter will calculate your income based on your bank statements. This is a great tool so there is no question on what you qualify for. Your income calculator will be signed off by the underwriter who will eventually underwrite your loan. As you can see, way less documentation is needed for a bank statement loan.
One-Year Tax Return Mortgage Program
Gustan Cho Associates also have a one-year tax return program available for our self-employed borrowers. This will calculate your income based on ONE year of IRS tax returns, unlike your conventional guidelines where you need a two-year average. Your business must be active for a minimum of two years, but they will calculate your income based on your most recent year of tax returns. This is a great opportunity for newer businesses or newly profitable businesses. For more details on this program, please call Mike Gracz on 630-659-7644 or email firstname.lastname@example.org.
Bank Statement Deposit Only Mortgage Versus Other Loan Programs Available
Gustan Cho Associates are constantly expanding the loan programs we have available. We understand that our self-employed clientele can find it next to impossible to qualify for a mortgage. This is why we offer bank statements and one-year tax return mortgage loans. These are a great alternative to help you start building equity in a property and stop making your landlord rich. We have numerous different investors who offer bank statement mortgage loans. This allows us to be competitive in the market.
Home Purchase And Refinance Mortgage Programs
We also want to make our self-employed borrowers know bank statement loans are available for refinance transactions. You can use a bank statement loan for a Cash-out refinance with a minimum credit score of 620. Credit scores between 620 and 679 are capped at 80% loan to value for cash-out refinancing. With a credit score is above 680, you can go up to 85% loan to value. This is important considering Conventional and FHA mortgage guidelines have recently lowered their Cash-out refinance limits to 80% loan to value.
Qualifying With A National Lender With No Overlays
Gustan Cho Associates offer mortgage loans without additional LENDER OVERLAYS. This can help more clients get into CONVENTIONAL, USDA, FHA, and VA mortgages. About 75% of our clients have been turned down by their current lender or are dealing with an experienced loan officer. We offer more mortgage products than most lending institutions, including our bank statement loan programs. If you’re having trouble qualifying for a mortgage, please give us a call. We will put you on a financial plan to qualify as soon as possible. To set up a one-on-one mortgage consultation, please call Mike Gracz on 630-659-7644 or email email@example.com. we are available 7 days a week including holidays to help you with your financing goals. We look forward to helping you and your family achieve homeownership.