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Unraveling the Mystery: A Deep Dive into No Doc Mortgages and Similar Products
In the ever-evolving landscape of home financing, navigating the myriad mortgage products can be daunting. Today, we're...
You may have read the title of this blog post and thought “how is that possible?”. If that’s you, you likely remember that stated income loans were one of the culprits of the housing market collapse in the early 2000s. Basically, lenders were taking the income stated on the application and being like “I believe you”. No paperwork, no documentation, no double checking. Just handing out loans on the honor system. That obviously didn’t work too well because a lot of borrowers defaulted on their loans because they couldn't afford the houses they were buying.
The Dodd-Frank Act of 2010 put some guidelines in place for lenders, and while stated income loans are not what they used to be, there’s a new and improved version of them available today. If you’ve ever heard of the term “bank statement loan”, that’s another way these are known. Other options that were tossed around before settling on the term “bank statement loan” were: “we’ll double check this time loan” and “show me your money loan”. They didn’t have quite the same type of clarity and ring as “bank statement loan”, so here we are.
Unfortunately, one of the drawbacks from the Dodd-Frank Act of 2010 is that it created quite the pickle for the self-employed. You know, people like accountants, real estate agents, independent contractors, singers, actors, writers, and other types of small business owners. These folks often don’t have as much on their W2 because they are maximizing their legal deductions. They also don’t always get a steady paycheck. This makes qualifying for a conventional loan from a big bank pretty tough.
That’s why it’s important for the self-employed to learn about bank statement loans. Bank statement loans can be used to purchase a house, but the lender reviews different financial information to determine approval. Here’s a short list of what you can expect:
If you’re self-employed or run a small business and were not approved for a conventional loan through one of the big banks, a bank statement loan might be a good option. I’d recommend giving the experts at Truss Financial Group a call. They take a common sense approach to lending and specialize in bank statement loans. This is their jam, and they’d love to help you learn more.
May 25, 2023by Jason Nichols
In the ever-evolving landscape of home financing, navigating the myriad mortgage products can be daunting. Today, we're...
May 22, 2023by Jason Nichols
The home loan market is filled with a variety of options designed to meet the unique needs of different borrowers. One...
May 18, 2023by Jason Nichols
Being self-employed has its perks, but it can also come with its share of challenges. One of the biggest challenges...