Self-Employed Bank Statement Mortgages And Guidelines

Gustan Cho Associates are mortgage brokers licensed in 48 states

In this blog, we will cover and discuss self-employed bank statement mortgages and eligibility guidelines. 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 Statements Mortgages With No Income Docs

Self-employed bank statement mortgages were unheard of until now. Business owners and self-employed wage earners had a difficult time qualifying for mortgages due to tax deductions on their business returns. Self-employed owners can greatly write off expenses on their income tax returns. Utilizing unreimbursed business expenses can save self-employed wage earners thousands of dollars. However, since the adjusted gross income is affected, it affects when qualifying for a mortgage.

Ability To Repay Your New Home Purchase

Many successful self-employed wage earners can easily afford to purchase a high end home and afford a larger mortgage. However, due to having problems qualifying for a mortgage, many had no other choice but to rent or buy a smaller home. Now with our bank statement mortgage program, self-employed wage earners can qualify for a mortgage with no income tax returns required. Our non-QM bank statement mortgages have no maximum loan limit. There is no private mortgage insurance required. 

Benefits Of Self-Employed Bank Statement Mortgages

Benefits Of Self-Employed Bank Statement Mortgages

Homebuyers who are self-employed and cannot qualify for a mortgage due to substantial tax write-offs can now qualify for bank statement mortgages with no income tax returns required. 12 months of bank statement deposits are averaged. The average monthly deposit is used as the qualifying income. Withdrawals and/or monthly ending balances do not matter. We only care about deposits.

Benefits of Self-Employed Bank Statement Mortgages

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 normally $3 million. Loans with over $3 million amounts will be qualified on a case-by-case scenario basis.

Self-Employed Homebuyers Can Now Qualify For Mortgages With No Tax Returns Requirement

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 borrowers’ tax returns. The large itemized deductions most self-employed borrowers utilized often disqualified them in qualifying for home loans. We will discuss and cover 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.

Self-Employed Bank Statement Mortgage Process

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
  • Up to 50% debt to income ratios but can be higher with strong compensating factors

Mortgage guidelines on non-QM loans are not set in stone like guidelines on government and conventional loans. Exemptions can be made if borrowers may not meet a specific lending guidelines by Non-QM lenders.

Mortgage Guidelines And Eligibility Requirements

Mortgage Guidelines And Eligibility Requirements

To qualify, borrowers need to be self-employed for the past two years. Borrowers need verification of rent for the past 12 months. Verification of rent is proven by getting the lender 12 months of canceled checks and/or 12 months of bank statements. A verification of rent form provided by the lender needs to be completed, dated, and signed by the landlord. Just rental receipts is not sufficient.

Non-QM and Self-Employed Bank Statement Mortgages Credit Requirements

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 normally $3 million. Large loan sizes over $3 million can be done on a case to case basis. Mortgage rates on non-QM bank statement loans depend on the borrower’s credit scores and down payment. There is no private mortgage insurance required.

Highlights Of Bank Statement Mortgages

Here are the highlights of our non-QM bank statement mortgage program with no income tax returns required:

  • 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 on bank statement mortgages
  • However, Gustan Cho Associates offers non-QM mortgages one day out of bankruptcy and foreclosure
  • Available on primary homes, second/vacation homes, and investment properties
  • Non-Warrantable condos, townhomes, 2 to 4 units, and PUDs 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

12-months bank statement mortgages are becoming increasingly popular for self-employed wage earners.

Qualifying For NON-QM And Bank Statement Mortgages

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 a faster response. Or email us at [email protected] The team at Gustan Cho Associates is available 7 days a week, on evenings, weekends, and holidays. Gustan Cho Associates is a mortgage company licensed in multiple states with no lender overlays on government and conventional loans.

Get Approved Today For Self-Employed Bank Statement Mortgages

We also have a national reputation for being a one-stop mortgage shop for having every mortgage products available in today’s market. From government and conventional loans to every non-QM and alternative financing mortgage program for owner occupant homes, second homes, investment properties, and commercial loans. 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 [email protected]