To make a home loan, mortgage lenders look at the borrower’s source of income. Typically, the verification is done using the W2 tax forms. However, this can pose a problem if you are working as an independent professional, e.g. B. as a freelancer. This is because freelancers, homeowners, gig workers, and contractors don’t need to submit tax forms. This is where bank statement mortgages play their role.
Thats how it works. All you have to do is prove your source of income by submitting your statements for a year or two. Read on to find out more.
What is a bank statement mortgage?
A bank statement mortgage allows the lender to verify your income using bank statements instead of tax forms. For example, traditional mortgage loans require the borrower to submit their tax return for verification.
Mortgage applicants, on the other hand, can opt for a loan statement.
Who should opt for a bank statement loan?
If you fall into one of the following categories, you can use your bank statement to apply for a mortgage.
People with irregular income streams
Freelancer or gig worker
Persons with seasonal income
Types of Bank Statement Loans
Depending on your situation and the lender, you can choose from different programs. Although most lenders require at least a year’s worth of explanations, some may not require as much detail. However, if you present 2 years of bank statements, you can negotiate better conditions and tariffs.
If you are unable to provide a valid business statement now, there is another option: you can provide a personal statement. They may use a small portion of your deposits for qualification purposes.
Sometimes you may need to provide an income statement for your business to get a loan.
How Do You Get a Bank Statement Mortgage?
Typically, bank statement mortgages fall into the “nonqualifying mortgage” category. This is because they do not meet traditional lending standards. Not all lenders offer these mortgages. In fact, many credit unions and banks do not offer these loans.
In this case, you should look for a lender who specializes in mortgage lending. If you don’t qualify for traditional mortgage financing, you can also contact many lenders to see if they can accept explanations for this service.
Don’t forget to inquire about the requirements for business and personal statements. This includes questions about the billing period. Other important questions could be interest rates and payment requirements.
What are the mortgage rates?
If you are self-employed, seasonal earner, consultant, freelancer, tax consultant or artist, you can apply for a needs-based final loan.
As for interest rates, down payment requirements vary by lender. Hence, it is better that you shop around to get the best deal.Apply for a Mortgage Home Loan with Arvest Bank -