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Self Employed Bank Statement Loan Program

John Thomas April 27, 2019 Tags: , , ,
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Self-Employed? Here’s How You Can Qualify for a Bank Statement Loan

Are you self-employed? Consider a Self Employed Bank Statement Loan Program. You belong to almost nine million self-employed people in the United States. You enjoy the advantages of self-employment that aren’t afforded to full-time workers—a flexible schedule, control of your life and the ability to select who you work with and what you do. You can apply now by calling the John Thomas Team at 302-703-0727 or you can APPLY ONLINE

The financial perks of self-employment can be tremendous too, opening up any number of tax deductions related to the business.

One of the benefits if you’re self-employed and looking into purchasing a home is the privilege to take a self-employed bank statement loan.

For the sake of our readers who aren’t familiar, let me define a few terms:

Self-employed: you’re considered self-employed if you have an income-generating business but without any employees. If you have one employee then you may be categorized as a small business.

W2s: The W-2 form is the document an employer is required to send to each of their employees and the Internal Revenue Service (IRS) at the end of the year. The form reports the employee’s annual wages and the amount of taxes withheld from their paychecks.

Bank statement loan: A bank statement loan is a relatively new loan for the self-employed borrower.  Instead of qualifying with your tax returns and W2s, you qualify with bank statements as the proof of income!

Self Employed Bank Statement Loan Program

How to Qualify for a Self-Employed Bank Statement Loan

  1. At least 2 year self employed or business owner.
  2. Bank statements: You’ll generally need to submit either 12 or 24 months’ worth of bank statements.  Depending on the your qualifications, you may be able to use both your personal and business bank statements together as qualifying income.  The income will be the average of the total income overall 12 or 24 months of deposits.
  3. Down payment: The maximum allowable loan-to-value ratio is usually 90%, which means a minimum down payment of 10%.  If you have a lower credit score (especially under 580), expect to need to put closer to 20% down payment.
  4. Credit Score: Credit score requirements vary among lenders. However, it seems that most want at least a 580 credit score. However, there are some lenders that offer bank statement programs to borrowers with a credit score as low as 500.  Keep in mind, the lower your credit score, the higher the down payment required and the higher the mortgage interest rate.
  5. Debt-to-Income Ratio: Bank statement mortgages allow higher than usual DTI ratios, with nearly every lender allowing a maximum ratio of 50%.
  6. Loan Amount: The maximum loan size varies among lenders.  Some are capped at $2,000,000, while others will loan all the way up to $5,000,000.
  7. Profit and Loss Statement: Some lenders will require a P&L statement (profit and loss statement) that is prepared by a CPA. Not all lenders will require a P&L though. Keep in mind, that when there is no P&L required, often only personal bank statements are eligible to be used.

What are the Guidelines for Bank Statement Loan Programs?

The Self Employed Bank Statement Loan Program is an alternative solution for self-employed borrowers with active businesses and strong cash flow, but have numerous tax write-offs that do not allow them to qualify for a traditional conventional mortgage loan. Below are the guidelines:

  • Can be Use for Purchase, Rate/Term Refinance, or Cash-Out Refinance
  • Loan Amounts from $75,000 to $5,000,000
  • Loan to Value up to 90% on purchase transactions
  • Occupancy type of Primary Residence, Second Home or Investment Property
  • Debt to income ratios up to 50%
  • Can Use 12 or 24 months of Personal or Business Bank Statements
  • Can be Fixed Rate or ARMs
  • Can be 30 Year or 40 Year Terms
  • Interest Only Payments are Available

Are You a Real Estate Agent with Self Employed Borrowers?

If you are a real estate agent with self employed borrowers that have been turned down for a mortgage loan to purchase or refinance a home because of their tax returns, then the Self Employed Bank Statement Loan Program is a great tool for you to add to your toolbox. Call John Thomas today at 302-703-0727 to learn how you can partner with us to grow your business.

How Do You Apply for a Bank Statement Loan Program?

If you’re a self-employed borrower who needs to utilize a Bank Statement Loan Program and looking into purchasing or refinancing your dream home, we’re here to make things easy for you! APPLY ONLINE HERE, or call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713

Self Employed Bank Statement Loan Program

About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it. Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.