Being self-employed does not mean that you cannot obtain financing for your home. In addition to your bank statement, you do not need to submit any tax returns or financial statements to purchase a new home or withdraw refinancing of an existing home you already own.
Bank Statement Mortgage Program allows self-employed borrowers to have eligible bank statements to help verify income rather than tax returns. The lender will use these reports to analyze income and prove the ability to repay the loan. This program is very suitable for business owners, real estate agents, consultants, restaurant owners, gig economy, entrepreneurs, etc.
What is a Bank Statement Mortgage Loan?
Bank statement mortgage loans replace traditional income-reporting loans as an alternative to borrowers who cannot verify income in the traditional way by providing tax returns, W2 forms, and pay slips for the previous two years.
These are high-quality unsecured loans, non-traditional loans, or extended standard loans that allow other forms of documentation to prove the ability to pay. It sounds like bank statement loans allow borrowers to verify their income through bank statements.
Difference between a Bank Statement Mortgage Loan and a Traditional Mortgage Loan
Traditional loans usually require tax returns, W-2 forms, and pay stubs to verify the borrower’s income. Bank statement mortgage program provide a different option for self-employed borrowers to verify their income without using tax returns.
Bank Statement Mortgage for Self Employed
To apply for a bank statement loan, a self-employed borrower can provide a mortgage lender with a bank statement for at least 12 months, showing a fixed deposit. This allows the financier to see how much money he can borrow. The financier will then verify your bank statement by calling your bank or completing a verification of deposit (VOD) request and mailing or faxing it to your bank.
If you use your commercial bank statement to qualify, the financier will still need to see the overheads you incurred for owning a business, but will not punish you for the expenses you write off on your tax return.
Special Considerations for Bank Statement Loans
You can use statements from multiple bank accounts, but they cannot be a combination of personal accounts and corporate accounts. Accept deposits transferred from corporate accounts to personal accounts.
As long as the income is not calculated twice, you can combine the W2 income with the bank statement income.
There is no mixed funding. You can consider foreign bank statements and foreign assets, which must be translated into English.