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Complete Guide to Stated Income Personal Loans
Complete Guide to Stated Income Personal Loans
If you are currently unemployed, were recently laid off, or work for...
By: Jason Nichols on Feb 9, 2024 5:00:00 AM
In the realm of non-traditional mortgage lending, bank statement home loans have emerged as a beacon of hope for a diverse group of borrowers, particularly the self-employed, freelancers, and those with irregular income streams. These loan programs eschew the conventional income verification methods in favor of analyzing personal or business bank statements to assess a borrower's income. Among these, the 12-month and 24-month bank statement loans are the most prevalent, each with its unique features, benefits, and considerations. This blog delves into the nuances of these two loan types, helping you understand which might be the best fit for your financial situation and homeownership goals.
Before we dive into the specifics of 12-month versus 24-month bank statement loans, let's clarify what a bank statement loan is. Traditional mortgages require W-2 forms, tax returns, and pay stubs for income verification. However, for those with non-traditional income, these documents may not accurately reflect financial stability or cash flow. Bank statement loans, therefore, use deposits shown in bank statements to calculate income, offering a viable mortgage solution for non-W-2 earners.
12-month bank statement loans require the borrower to provide one year of bank statements to verify income. This shorter timeframe can be advantageous for borrowers who have recently seen an increase in income or who may have had a few off months more than a year ago.
24-month bank statement loans, on the other hand, require two years of bank statements. This longer period provides a more comprehensive view of a borrower's financial health, potentially benefiting those with fluctuating incomes.
When deciding between a 12-month and a 24-month bank statement loan, consider the following factors:
Bank statement loans offer a flexible path to homeownership for non-traditional earners, with both 12-month and 24-month options providing unique advantages. The choice between them hinges on your individual financial situation, your income stability and trend, and your personal preferences regarding loan application preparation. As always, it's wise to consult with a mortgage professional who can offer personalized advice based on your financial scenario. By understanding the nuances of these loan types, you can make an informed decision that aligns with your homeownership aspirations and financial goals.
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