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Bank Statement Mortgage Loans

Generally when you apply for a home loan, you often need to provide your W-2’s and tax returns. But what if you don’t have those? Luckily, there are other options.

Bank statement loans are a type of loan that allows you to get a mortgage without the documents that most loans need to prove your income. They are also known as “self-employed mortgages”, “alternative documentation loans”, or "Non-QM loans".

Bank statement loans can be used if you work for yourself or own a business. They can also be used if you do not have a steady income or have more than one employer who can prove your salary.

When applying for a bank statement loan, instead of providing your W-2s, pay stubs or employer verification forms, you would provide personal bank accounts, or personal and business bank accounts, to prove your income and cash flow.

You will still need to give your lender some of the normal paperwork as part of the loan process. In fact, you will likely have even more forms to fill out and documents to provide, because proving your income will be more complex than for a conventional loan.

Some of the things you may need for a bank statement loan are:

  • 12-24 months of personal and/or business bank statements (we know, it’s a lot, but you can easily pull these from your online bank account)

  • Two years’ history of self employment

  • A credit score that is good (this exact number will vary from lender to lender)

  • Enough cash or other liquid funds to cover several months of your mortgage payments

  • Proof of any liquid assets, such as 401(k) or investments

  • Business license

  • A letter from your accountant proving business expenses and stating what percentage of the business you own, and that you file your tax returns as an independent contractor.

The exact items you will need to provide will vary from lender to lender, but you can expect a bit of work upfront. Some lenders may even allow the use of gift funds. If you get turned down by one lender, be sure to shop around. You may still be able to get a loan from someone else.

Our loan officers here at Penny Lane are experts in shopping for these types of mortgages and will help you each step of the way, ensuring that the process goes smoothly and that you end up with a loan that is suitable to you.



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