Bank Statement Mortgage Loan Question: Should You Get It?
- Lakeview Mortgage Bankers
- Aug 18, 2022
- 3 min read
Updated: Sep 2, 2022
People who are self-employed may find it difficult to get a traditional bank loan to finance a mortgage. However, there are several bank statement mortgage loans available that are designed specifically for self-employed borrowers.
What Is a Bank Statement Loan?
A bank statement loan is a mortgage loan that allows self-employed borrowers to use their bank statements instead of their tax returns to verify their income for loan qualification purposes.
There are two types of bank statement loans available – 12-month and 24-month. The difference between the two is the length of time that the self-employed borrower must provide bank statements. The 12-month loan requires 12 months of bank statements, whereas the 24-month loan requires 24 months of bank statements.
How Does a Bank Statement Loan Work?
To qualify for a bank statement loan, self-employed borrowers must provide the lender with 12 months of bank statements from their business checking account.
The lender will use the bank statements to verify the self-employed borrower’s income for loan qualification purposes. Also, the lender will use the bank statements to verify the self-employed borrower’s average monthly deposit amount.
The average monthly deposit amount is used to calculate the self-employed borrower’s maximum loan amount, which is the lesser of the self-employed borrower’s average monthly deposit amount multiplied by 12 or $2 million.
The self-employed borrower’s maximum loan amount may be reduced if the self-employed borrower has a high debt-to-income ratio or if the self-employed borrower makes a large down payment.
Are You Eligible for a Bank Statement Loan?
This type of loan is usually available to people who make money from investing in real estate full-time. To qualify for this type of loan, banks look at the revenue generated from the person's real estate portfolio.
A bank statement loan is a type of loan that is given to people whose income can't be documented traditionally. This could be because their employer pays them via prepaid cards instead of direct deposits.
How to Find a Bank Statement Loan?
To find a bank statement loan, you'll need to look for lenders that specifically offer this type of loan. You can start by searching for "bank statement loans" on the internet.
You can also ask your friends and family if they know of any lenders that offer this type of loan. Finally, you can also visit your local bank and ask if they offer this type of loan.
Is It Right for You?
A bank statement loan can be a great option for small business owners who might not otherwise qualify for a traditional business loan. However, it's important to make sure that you understand the terms and conditions of the loan before you agree to it.
Be sure to read the fine print and ask questions so that you fully understand the loan. This way, you can be sure that it's the right loan for your business.
Wrapping Up
Bank statement mortgage loans can be a great option for self-employed borrowers who may have difficulty qualifying for a traditional mortgage.
These loans can provide flexibility in documentation requirements and may be easier to qualify for than a traditional mortgage. However, it is important to compare rates and terms from multiple lenders to ensure you are getting the best deal possible.
Are you looking for the best mortgage banks? Lakeview Mortgage Bankers has a premier mortgage team based in Massapequa, New York. We offer simple and straightforward mortgages. Get in touch with us.
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