Our 12/24 Month Bank Statement loan is an ideal Non-QM option for self-employed borrowers. Even when complex tax deductions make tax returns hard to interpret, this program uses bank statements to give a clear view of current income and revenue, helping them qualify more easily.
A Bank Statement loan is a home loan program designed for self-employed/ business owners. For qualification purposes, the lender uses the deposits made into the business owner’s account as the source of income for qualification purposes, instead of using the applicant’s tax returns.
The primary difference between a Bank Statement loan and a traditional loan is that the applicant qualifies based on the deposit income in the bank statement, rather than the applicant’s tax returns.
If a borrower deposits their regular business income into a personal account, they can use personal bank statements to qualify. However, approval may be more complex if the account is shared with another person, such as a spouse with separate income. For 1099 wage earners depositing income into a personal account, we recommend using our 1099 Income Program instead.
Yes. If borrowers are qualifying for a bank statement loan, they may be asked to provide a letter from a licensed tax preparer. On a Bank Statement Loan, we are not reviewing tax returns, so we rely on third parties such as a licensed tax professional to verify certain aspects of their business.
Here are some examples of the things commonly requested:
Verify the business’s expense ratio (%)
Verify the length of time the business has been operational.
Verify the ownership percentage of the business
Applicants could use a Bank Statement loan, but it’s usually much easier to qualify with our 1099 Income Program. Bank Statement loans are designed for true business owners, while independent contractors earning 1099 wages aren’t technically self-employed. Since the 1099 program is specifically tailored for this type of income, it can often result in higher qualifying income and greater buying power than a Bank Statement loan. Both programs are similar in terms of minimum down payment, credit score requirements, and other basic guidelines, but choosing the right program can make the process simpler and more advantageous.
Yes, as long as the bankruptcy, foreclosure, or short sale is completed at least 12 month ago or longer. Depending on the length of time after the certificate of title date, it may affect the minimum down payment on a home.
Ready to make your move? Apply now and let our team guide you every step of the way.
