If you’re self-employed and your tax returns don’t necessarily reflect your true financial situation, you may be wondering how you can take out a mortgage. A bank statement loan may be a good option for you if your bank statements are a better indication of where you stand, which is often the case for self-employed individuals. They can sometimes be easier to qualify for than other home loans. Here’s what you need to know about this type of mortgage and how to find out more information about how to qualify.
What is a bank statement loan?
A bank statement loan is simply a mortgage that allows you to provide your bank statements as proof of income versus W-2s or tax returns. While you don’t necessarily have to be self-employed to take out a bank statement loan, this type of mortgage often benefits self-employed individuals, or families where the primary breadwinner is self-employed.
This is because self-employed individuals may not have a steady income. It’s necessary to use bank statements to show the borrower’s monthly and yearly income as well as expenses. Additionally, a borrower’s tax return may not be an accurate picture of whether or not they can afford the new home loan, while bank statements may indicate that they can.
Although they sound similar, a bank statement loan is different from a stated income loan. A bank statement loan can be taken out by individuals in owner-occupied properties while stated income loans are for investors who are flipping properties or purchasing property for rental income.
This type of loan may not be the right fit for everyone. However, it can be an excellent choice for individuals in certain circumstances. You may qualify for a bank statement home loan even if you don’t qualify for other types of home loans. You may potentially be able to secure a loan with no prepayment penalties. The underwriting process may be faster than other types of mortgages.
There are some special eligibility requirements with a bank statement loan:
Unique features of the bank statement loan:
Contact Silver Leaf Mortgage Today
Interested in a bank statement loan? Our Silver Leaf Mortgage Denver mortgage experts have 100 years of combined experience in the home loan industry. We can give you the information you need to decide if a bank statement loan is right for you or help you explore other loan products.