If you’re self-employed, don’t make the mistake of thinking that you can’t take out a home loan. Self-employed borrowers may be eligible for some good mortgage programs. This includes loans that don’t require you to submit tax returns but let you use your bank statement to verify your income instead. Multiple lenders now offer bank statement loan programs.
There are specific requirements that you may be able to expect from any lender that offers bank statement programs. The exact requirements to qualify may vary from one lender to another. So, it’s usually wise to reach out to a mortgage professional to obtain the best possible rate for your individual situation. If you plan to try to take out a home loan based on your bank statements and income, it’s important that you take the time to gather up all of the correct documentation, so that the process is as simple as it can be.
You will typically need to show a lender either 12 or 24 months of your bank statements, either business, personal, or some combination of the two. Often the lender will average the numbers on the statements out over the amount of time shown to obtain proof of income for the time period you’re attempting to document.
Typically, if you have a solid credit score, you’ll need to put down at least 10% of the loan as a down payment. If your credit score is lower, you should plan on needing to put down more money. In fact, you may need to put down as much as 20% as a down payment in order to obtain a home loan.
The specific requirements for a credit score will be different from one lender to another. However, most will want a score of at least 580. In some cases, lenders will be willing to work with borrowers with credit scores that are slightly lower. The lower your credit score is, the more money you’ll need to put down upfront as a down payment to secure the investment that your lender is making, however.
There may be other variables from one lender to another, as well. In some cases, the lender will require additional reference documents to prove income, such as a Profit and Loss statement. In other situations, there may be a cap on how much money can be borrowed with this type of loan. Typically, the lenders are looking for as much information as they can obtain about the borrower’s finances so that they can determine if they are a reasonable risk.
If you are considering a bank statement mortgage, reach out to HomexMortgage.com. We’ll help you evaluate your financial situation and gather up the required paperwork so that you can obtain the financing that you need. Don’t let self-employment stand in the way of getting the home loan that you need and deserve – contact us today to learn how we can assist you.