Now, there's an option for self-employed borrowers.
Some people believe the American Dream is to start a business and create wealth and success. Others may see the dream as purchasing your own home. Unfortunately, these two dreams don’t always go well together. A bank statement loan can be the solution self-employed borrowers seek when buying a home.
To apply for a conventional mortgage loan, among the paperwork, the borrower usually must provide pay stubs and W-2s from the past two years. But if you’re self-employed or own a business, you don’t have W-2s or pay stubs. So, what choice do you have when seeking a mortgage loan?
Lenders have begun offering a relatively new loan program: the bank statement loan. This loan program requires only the bank statements of self-employed borrowers to determine if they can produce sufficient income to warrant approval for a mortgage loan. Here is an example* of the requirements needed to secure a bank statement loan:
- Provide 12 or 24 months of bank statements from the same account
- 700 minimum credit score
- 10% down payment required with mortgage insurance
- $170,000 loan minimum (up to $1.25 million)
- A debt-to-income ratio of up to 50%
- With an exception, a minimum of 2 years of self-employment or 1099 contract work can be made to 1-year self-employment if the same line of work is previously employed.
Don’t let business ownership prevent you from buying the home of your dreams. Look into a flexible bank statement loan and spend your time running your business, not worrying about how to qualify for a mortgage loan. Here's more information to find out if a bank statement loan is right for you, or call us at 888-661-1983.
*These are only examples of requirements for a bank statement loan.
