What Is A Bank Statement Mortgage Loan? – Most Lenders consider a lot of requirements and many mortgage eligibility during the loan application process, from the type of real estate you want to buy to your creditworthiness. your lender also requires your various financial statements including your bank statement.
But first, you have to know what is a bank statement mortgage loan. what does your bank statement show to your mortgage lender other than how much you spend each month? And how a bank statement mortgage loan works. Read on to find out everything about what is a bank statement mortgage loan.
Mortgage lenders need to confirm your income before approving your mortgage. They usually do this by looking at the W2 tax return.
But what if you don’t have these? It can be a problem when you are working as freelancers, contractors, seasonal workers, or gig workers who are unlikely to have the tax returns required for a traditional mortgage.
Bank Statement Loans are a type of loan that most loans allow you to take out a mortgage without the documents needed to prove your income. They are also known as “self-employed mortgages” or “alternative documentation loans.”
Bank Statement Loans are available if you are a self-employed person or own a business. It can also be used if you do not have a stable income or if you have multiple employers who can provide proof of salary.
However, if you have non-traditional income, you may be able to get a “bank statement mortgage”. This means demonstrating your income by displaying your time deposit in your bank account for a year or two.
What is a bank statement mortgage loan and how does it work?
Not all people know about what is a bank statement mortgage loan, as we know a bank statement is a monthly or quarterly financial statement that summarizes your banking transaction. Bank statements can be sent by mail, electronically, or both. By using bank statements you can track your money and report inaccuracies faster. Let’s say you have a checking account and a savings account, the activities of both accounts may be listed in a single statement.
The bank statement can also summarize the amount in your account and display a list of all activities during a particular period, such as deposits and withdrawals.
We already know about a bank statement, so what is a bank statement mortgage loan? A bank statement loan program allows you to check your income on your loan application using a documented bank deposit instead of your tax statement.
Traditional mortgages use tax returns, W2, and pay slips to check your monthly income. The higher the monthly income, the lower the debt-to-income ratio (DTI), and the lower the DTI, the higher the loan amount may be guaranteed.
However, providing these traditional work documents is not possible for those without a full-time employer. Instead, loan applicants can opt for a bank statement loan program.
Moreover, what is a bank statement mortgage loan, A bank statement loan is a type of mortgage that can be issued by a lender based on personal information or a bank statement rather than a tax return or employer’s review? If you work for yourself, own a business, or don’t have a stable income, a bank statement mortgage loan is a good option. Bank statement loans are offered at higher interest rates and may require a more down payment. Compare your bank statement loan offer with any other loan you may be able to obtain.
If you need more information about what is a bank statement mortgage loan, it’s best to find out more about Just Funded Mortgage.
How does a bank statement mortgage loan work?
After we know about what is a bank statement mortgage loan, now we have to know how a bank statement mortgage loan work. Bank statement loans do not require a tax return, W2, pay slip, or employer confirmation form. Instead, you can use your personal bank account or your personal and business bank account to prove your income and cash flow.
As part of the lending process, some of the normal paperwork must be provided to the lender. Proof of income is more complex than a traditional loan, so you may need to fill out and submit more forms.
Some of the things you need for a Bank Statements mortgage loan are:
- 12-24 months personal or business statement
- 2 years self-employed
- Good credit score (the exact score you need depends on your lender)
- Sufficient cash or other liquid funds to cover months of mortgage payments
- Business License
Why Do Lenders Need Bank Statements?
If lenders already have all of the information, why do mortgage lenders need to check your bank statement? In general, lenders need to make sure that the borrowers have enough cash to make their monthly payments and that they have enough funds in their accounts to cover their down payment. Your lender will also want to make sure you have a mortgage payment for at least a few months. In this process, all your bank accounts will be likely checked by lenders during the process.
3 steps to finding a bank statement
We already know what is a bank statement mortgage loan, the next step is how to find your bank statement. Bank statements can be easily found on the financial institution’s website. The websites of each financial institution are a little different, but here are some simple steps.
Sign in to your account – Go online to your bank or credit union and log in to your bank account.
Find the statement – A tab labeled “Documents” or “Statements” appears on the bank’s home screen. Before you can view the Documents tab, you may need to first navigate the tab called Account Details.
Download the statement – This tab displays a set of links to the PDF file labeled “Statement” and the corresponding data. Find the correct statement and download it. Save the file in a location that you can easily access. Repeat these steps until you have at least two bank statements in every account and give them to the lender.
If you need more information or question about what is a bank statement mortgage loan, Just Funded Mortgage is available on Monday – Friday: 9:00 AM – 7:00 PM to answer any questions you have about Non-QM loans, or give us a call at 833-888-3863.