Acquiring bank statement loans isn’t difficult as some financial companies don’t base their decision entirely on the credit score. They do consider the borrower’s monthly bank statements to determine if he’s capable of repaying the loan.
If you’re planning to apply for bank statement loans to finance a home, find a company who can give you the best solution. As a borrower though, you will need to do a few things before filling out those forms.
What you should know before taking out a bank statement loan
The first step that you need to do before getting a loan is to determine whether you would actually qualify for it. Otherwise, you’ll only hurt your credit if you don’t get approved for the loan. Here are seven questions to ask before applying for bank statement loans:
1. How Much Can I Afford?
Although some financial companies look at other expenses before approving a loan, you need to also figure out how much you can really afford to pay. A few things that you can do:
- Review and re-review your budget and your cash flow for the month
- Find out if you have other extra bills to pay like cable or magazine subscriptions
- Write down all your expenses including money that you pay for dining out or movie nights
Thinking of borrowing more funds? Cut down on costs to make it easier to repay loans.
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2. What are the Terms and Conditions of the Loan?
To avoid future problems, it’s essential to know and understand the loan specifications. How much are the penalties for late payments or the repayment demand dates from the lender? Read and comprehend. Always ask questions.
3. Are There Other Fees Involved?
Some companies may charge other fees when applying for a loan. Find out how much and whether they are refundable or not. If it’s not refundable, apply only when you’re almost a hundred percent certain you’ll get approved.
4. How Much Can I Borrow?
You may do a comparison between lending institutions as to how much one is offering you. Remember that banks don’t usually finance 100 percent of the amount. Some of them may only lend you up to 90 percent or less, depending on the institution and your capacity to pay.
5. How Much is the Downpayment?
Since banks don’t finance the whole amount, you will need to figure out how much you need to save for your home. Cut down on unnecessary expenses when you can.
6. How Do They Calculate the Interest Rates?
Two or three banks may offer you the same amount with the same interest, yet it still varies especially when you compare the EMIs. The reason being is they have different ways of calculating the interest rates according to their bank statement mortgage loans. Make it a habit to always compare the EMI of different financial institutions that offer the same amount.
7. Do They Offer Top-Notch Service?
When applying for bank statement loans, always work with a financial institution that offers both speed and convenience. Their staff should be extra responsive, professional and knowledgeable.
Work on these seven questions to own that dream home. Always consult a professional that can give you only the right solution to your needs.