What are Bank Statement Loans?
Tucson / Phoenix Arizona: There’s a new kid on the block in the lending world, and it’s gaining traction—bank statement loans. A great alternative to traditional lending for many, it’s no surprise that these types of loans are gaining popularity. In this article, we will unpack what makes these loans so advantageous and why you might consider getting one.
But first, I wanted to share a story of a self-employed couple that came to see me. They had been trying to buy a house for years, but were constantly turned down by the banks. After I got their tax returns, and explained what their income on their tax returns, I took a look at their business bank statements. Short story, they got into a home two months later.
Understanding Bank Statement Loans
Bank statement loans, also known as self-employed laons or mortgages, are loans that primarily use your bank statements to verify income over typical income documents like W-2’s and tax returns. Unlike traditional loans which heavily rely on your income, credit rating, and employment status, bank statement loans emphasize your cash flow. You’ll typically need 12 or 24 months of bank statements, a good credit history, down payment and a reasonable debt-to-income ratio.
Accessibility and Ease of the Process
Think of bank statement loans as the hassle-free cousin of traditional loans, such as FHA, VA and Conventional. These loans provide easy qualification through your bank statements, rather than up-to-date bookkeeping documents. If you’re a self-employed individual or a business owner, this might be your golden ticket. Plus, the application and approval process is straightforward, making it an inviting option.
Who Benefits From A Bank Statement Loan?
Because of the flexibility of the bank statement loans, many people might now be able to buy a home. So who benefits from this loan program? Bank statement loans cater to entrepreneurs, freelancers, and others with nontraditional income streams, these loans acknowledge the evolving nature of work and income in today’s modern economy. In doing so, they extend an opportunity for financial advancement to those who, though financially responsible, are marginalized by the stringent requisites of traditional lending.
Bank Statement Loans - FAQ
A bank statement loan is designed for self-employed borrowers that uses their last 12 or 24 months of banks statements to prove their income and ability to repay the loan.
Bank Statement loans are designed for self-employed, freelancers, entrepreneurs and other business owners that would otherwise not qualify for a traditional mortage.
Yes, you can use business or personal bank statements of the past 12 or 24 months.
If you are interested in learning more about the 12 or 24 month bank statement loan, then please give us a call. We would love to have an opportunity to help you.
All loans subject to underwriter approval; terms and conditions may apply. Subject to change without notice. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.
Contact the Joseph Small and Team to learn more about financing options in Arizona, Alabama, Colorado, Florida, North Carolina and South Carolina. #bankstatementloan