Bank statement loans offer a viable alternative if the borrower cannot qualify for a traditional mortgage. This non-QM option utilizes a borrower’s bank statements to see a complete financial picture.
Here at A Nightmare on Loan Street Blog, the goal is to provide lots of information on alternative loans. You know, the skinny. The 411. The realest of the real. So let’s talk more about why a bank statement loan is kind of awesome.
- You are Self-Employed
A bank statement loan is ideal for the self-employed, who often don’t have the proper documents to qualify for a traditional loan like paystubs or a W2. 12-24 months of bank statements give the lender a way to verify the borrower’s finances. Bank statements can show an average monthly income, help identify expenses to calculate a Debt to Income Ratio (for more on that read here), and determine how much an applicant can borrow. Boom. All from the bank statements any business owner already has available.
- Your Credit Score Isn’t Excellent
Lenders are going to run a credit score for anyone seeking a bank statement loan. That’s just the way they roll. However, you don’t need an excellent credit score to qualify. Most lenders will look at credit scores as low as 600. Just keep in mind that the credit score is just part of the equation. If it’s on the lower end, this may result in a larger down payment needed. Speaking of which…
- You Want a Reasonable Down Payment
If you’ve been browsing the non-QM options when it comes to a mortgage, your eyeballs may have bulged a bit when reading about the down payment requirements. Down payments for non-QM loans can be over 20%. Yikes. A bank statement loan likely requires a down payment in the 10-20% range. Could it be over 20%? Sure, there’s a chance. But there’s also a good chance it could be 15%. You’ll want to talk to someone who can get you an exact figure, and I’d recommend reaching out to Truss Financial Group if you’re thinking about a bank statement loan.
- You are Retired
Oh snap! Yes, you read that correctly, bank statement loans are options for retirees. Why would this be a good option? I’ll tell you why - retirees may have a large net worth, but very little income. You know, given that they are retired and all. When a retired borrower is looking for a mortgage for a vacation home, this can be a challenge. The bank statement loan can certainly help in this situation.
- You’re Purchasing an Expensive Home
If you’re in the market for a new home in California, you know what I’m talking about. Home prices in the seven or eight figures are not uncommon. If you’re looking at homes along the coast or for a very large estate, there may be limited options for financing. Sure, not everyone is going to qualify for a loan of this size, but if you do, a bank statement loan may be the way to go. Truss Financial Group offers loan options up to $[XX] million dollars.
Wow. Bank statement loans. Who knew? Well, I did, so that’s why I wrote this blog post. But now since you’ve read it, you do too.
If you’d like more information, I’d definitely reach out to an expert. They’ll help you get more granular on your specific situation, and the loan you’re seeking. That’s when it’s time to talk to Truss Financial Group.
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