Bank Statement Loans are designed for self-employed individuals and business owners who may not have traditional income documentation, such as W-2s or tax returns. These loans allow borrowers to qualify based on their bank statement deposits rather than tax returns, providing a more flexible option for those with non-traditional income streams .
Bank Statement Loans have specific eligibility criteria that cater to the unique financial situations of self-employed borrowers.
At NVWM, LLC, we provide Bank Statement Loans across Texas and Florida, designed specifically for self-employed borrowers.
Please reach us at relation@nvwm.llc if you cannot find an answer to your question.
A Bank Statement Loan is a type of non-qualified mortgage that allows self-employed borrowers to qualify for a home loan using their bank statements instead of traditional income documentation like tax returns or pay stubs. This loan is ideal for individuals with non-traditional income sources.
Bank Statement Loans are particularly beneficial for self-employed individuals, small business owners, freelancers, real estate investors, consultants, and anyone with fluctuating income or significant tax write-offs that reduce their reported income on tax returns.
With a Bank Statement Loan, lenders analyze your income over a period of 12 to 24 months using your bank statements. They assess your deposits to determine your qualifying income, rather than relying on tax returns or W-2s.
Key features include:
The minimum credit score required is 620. However, to qualify for the best terms, such as 90% LTV, a credit score of 720 or higher is recommended.
No, tax returns are not required for a Bank Statement Loan. Instead, your income is verified through 12-24 months of bank statements.
Yes, you can still qualify for a Bank Statement Loan if you have a bankruptcy, foreclosure, short sale, or deed-in-lieu in your history, provided there has been at least 3 years of seasoning since the event.
Bank Statement Loans can be used to finance owner-occupied residences, second homes, and non-owner occupied investment properties, offering flexibility for various real estate investments.
The maximum DTI ratio allowed is typically 50%, but to qualify for 90% LTV, a DTI of 45% or lower with a 720 credit score is required.
Loan amounts for Bank Statement Loans range from $100,000 to $3 million, depending on the property value, your credit score, and your verified income.
Down payments can be as low as 10% depending on your credit score and other qualifying factors. For higher LTV loans, a larger down payment may be required.
Yes, cash-out refinancing is available with a Bank Statement Loan. You can cash out up to $1M at greater than 70% LTV.
You need to have been self-employed for at least 2 years to qualify for a Bank Statement Loan. Additionally, one borrower must be self-employed, but a W-2 co-borrower is allowed.
Documentation includes 12-24 months of personal or business bank statements, proof of self-employment, a completed Bank Statement Narrative Worksheet, and proof of reserves.
Yes, a co-borrower can be included, and they can have traditional W-2 income. However, at least one borrower must be self-employed.
All large deposits must be sourced and documented. This helps the lender confirm the origin of the funds and ensure they are legitimate.
A minimum of 6 months of reserves is required. Reserves can include checking, savings, stocks, bonds, and retirement funds.
Some Bank Statement Loans may have pre-payment penalties, depending on the lender. It’s important to clarify this with your loan officer.
Unlike traditional mortgages, which require tax returns and W-2s for income verification, Bank Statement Loans use bank statements to assess income. This makes them ideal for self-employed individuals with fluctuating income or significant tax deductions.
Yes, if using business bank statements, borrowers must own at least 50% of the business. The business must be active, and the borrower must provide documentation such as business licenses and organizational documents.
Typically, up to 6 NSF or overdraft fees are acceptable under the “Rule of Thumb.” However, each case may vary, and it’s important to discuss this with your lender.
Yes, you can use either personal or business bank statements to qualify, or a combination of both, depending on your financial situation and the lender’s requirements.
Advantages include flexibility in qualifying criteria, no need for tax returns, the ability to qualify with a lower credit score, and higher loan limits compared to traditional mortgages.
Drawbacks include higher interest rates compared to conventional loans, larger down payment requirements, and the potential for pre-payment penalties.
NVWM, LLC is committed to providing Fast Approvals and Closings on Bank Statement Loans in Texas and Florida. We understand the unique needs of self-employed borrowers and offer tailored solutions to help you secure the financing you need with ease.
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