Self-Employed Bank Statement Mortgages Eligibility And Guidelines

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This BLOG On Self-Employed Bank Statement Mortgages Eligibility And Guidelines Was PUBLISHED On March 17th, 2019

Gustan Cho Associates now offers Self-Employed Bank Statement Mortgages. Mortgages for self-employed borrowers came to an abrupt halt after the 2008 Housing Bubble Crash. Stated income and bank statement loans for self-employed borrowers literally disappeared overnight. The whole mortgage industry went through a major overhaul. Self-employed bank statement mortgages were unheard of until now.

There are great benefits for self-employed bank statement mortgages:

  • There are no income tax returns required
  • Down payment can be as low as 10% down
  • 15% down payment for borrowers with credit scores under 660 FICO
  • The Minimum credit score requirements is 600 FICO
  • There is no private mortgage insurance required
  • The maximum loan amount is $3 million
  • Until now, most self-employed borrowers had a difficult time qualifying for mortgages due to the tax benefits they have been self-employed
  • Self-employed folks have the benefit of writing off many itemized deductions
  • Unfortunately, lenders will take the adjusted gross income filed on borrower’s tax returns
  • The large itemized deductions most self-employed borrowers utilized often disqualified them in qualifying for home loans

We will discuss Self-Employed Bank Statement Mortgages on this blog and its great benefits. 

How Does Self-Employed Bank Statement Mortgages Work?

Lenders want to make sure new mortgage borrowers have the ability to repay their new home loans. Stated income has been dead for more than a decade and there is no indication they will ever come back. Qualified income is the most important factor when it comes to qualifying for home loans. Credit scores and payment history is second.

Here is how self-employed bank statement mortgage work:

  • Mortgage underwriters will average 12 months of bank statement deposit
  • Borrowers can use personal bank statement or business bank statements
  • With personal bank statements, 100% of the deposits is averaged over a period of 12 months
  • That average is the qualified gross income used 
  • With business bank statements, 50% to 65% of the deposits is used as qualified income
  • The average deposits over the past 12 months will be the qualified income

Mortgage Guidelines And Eligibility Requirements

To qualify, borrowers need to be self-employed for the past two year. Borrowers need verification of rent for the past 12 months. Three credit tradelines reporting to all three credit bureaus. Up to 50% debt to income ratio with compensating factors. Six months reserves. Reserves are one month’s PITI. Larger non-qm jumbo loans may require 9 months to 12 months reserves. Maximum loan size is $3 million. Large loan sizes over $3 million can be done on a case to case basis.

Here are the highlights:

  • No Federal Income Tax Returns Required
  • Personal Bank Statement or Business Bank Statements
  • 600 Minimum Credit Score Requirement
  • Up to 90% Loan To Value with no mortgage insurance
  • Minimum $150,000 and Maximum Loan Amount of $3,000,000
  • Interest Only Program Available
  • 5/1 ARM or 30-year fixed rate mortgages
  • There is a two year waiting period after bankruptcy, foreclosure, short-sale, deed in lieu of foreclosure
  • Available on primary homes, second/vacation homes, and investment properties
  • Non-Warrantable condos, townhomes, 2 to 4 units, and PUD’s allowed
  • Gifted funds allowed
  • There is no pre-payment penalties on primary and second homes
  • No pre-pay penalty for owner-occupied and/or 2nd homes

Qualifying For NON-QM And Bank Statement Mortgages

Borrowers who need to qualify for non-QM bank statement loans for self-employed borrowers can contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@gustancho.com. We are available 7 days a week, evenings, weekends, and holidays. Special thanks to Dale Elenteny and our NON-QM Investor Jack Kotowski for the great informational video/blog. If you need to contact Dale Elenteny directly, please reach out to him at 630-479-2719 or email him at dale@loancabin.com.

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