12 or 24 Month Bank Statement Mortgage Program
Qualifying for a home loan program can be difficult for the borrowers unable to show a consistent income on their tax returns. This is a common incidence for self-employed professionals and even small business owners in some cases.
While you may have been rejected for some loan mortgages in the past due to this reason, it is the right time to consider applying for the 12 or 24 month bank statement mortgage program. If you have not heard about the Bank statement mortgage yet, read on this guide to get the all the necessary information.
Who can Apply for the Bank Statement Mortgages?
The Bank statement mortgage is the best alternative to qualify for the loans without the necessity to produce tax returns. These products are designed to meet the mortgage requirements of the borrowers with inconsistent or seasonal income who find it difficult to qualify for loans failing to show the qualifying income on their tax returns.
1. Self-employed Professionals
Verifying the income with the paystubs of the self-employed professionals can be a challenging task. Their net income claimed on the tax returns is often lower than the lenders would generally consider a mark in approving a loan to the customer.
Such borrowers may produce their bank statement to the lenders showing the actual record of income during each financial year.
2. Seasonal Employees
The seasonable employees salaried wages for certain period of the year (say 6 months or so) wherein have trouble in showing up returns to the lenders.
Most of the times, the salary over the 6 months period is considered as the annual income, falling shorter than that decided as the mark set for the loan approval.
In such cases, the seasonal employees may produce their bank statements to show their income during the entire year to give records of the income from any other temporary/ part time work done during the rest of the year.
3. Commissioned Employees
Those who receive payments in the form of commissions do not have a stable income wherein the monthly earnings can fluctuate depending on the commission received for each sale, lead etc.
4. Borrowers Having Income from Assets
The bank statement loan is just the perfect option for those who earn their living from pension, investments, social security etc. Those who can provide the assurance of having the steady income from similar sources for the next 3 years, stand the chance of getting quick loan approval.
Eligible Properties for Purchase with Bank Statement Mortgage Loans
The qualifying borrowers can take advantage of the bank statement mortgage loan programs to purchase properties such as:
- Single Family House (owner occupied)
- Condominiums
- Second Homes
- Residential properties with 2-4 units
- Investment properties
- Non-warrantable condos
Essential Documents to Qualify for Bank Statement Mortgage Program
The documents required to qualify for the Bank statement mortgage loans will depend on finance company where you want to seek the loan program. In general, you may need to produce the following documents to qualify for any loan program.
a. Bank Statements: You may choose to produce the bank statement for a period of 12 months, 24 months, 1-6 months. The self-employed borrowers may need to provide the 12 months bank statements of their personal account. If you are producing the business account statements, the minimum requirement is at least 24 months period.
*Some lenders offer loans for the bank statements produced for a term of 1-6 months wherein interest rates can go much higher than the 12 or 24 months programs.
b. Credit Score: Most of the lenders ask for the FICO credit score to qualify for their loan programs. Having a credit score above 680 is necessary even though the loans may come at a very high interest rate. Having higher credit score increases your chances to get low rates.
c. Self-employment Documents: You may need to provide the proof of self-employment such as business license, copy of the letter confirming your self-employment status etc. Read more articles on wink24news.