Bank Statement Mortgage | 24 and 12 Month Bank Statement Loan
For self employed borrowers, taxable income makes it difficult to qualifying for a traditional loan – a bank statement mortgage allows self employed borrowers to refinance or purchase a home without calculating income based off of tax returns. When a self employed borrower cannot qualify for traditional financing, a bank statement loan is a solution to affordable loans with easy qualifications and flexible down payments.
For a 24 and 12 month bank statement home loan, qualifying income is calculated by total deposits minus any disallowed deposits divided by the amount of months. Call or apply online to see if you qualify for a mortgage with bank statements – every case scenario is unique and starts with calculating self employed income.
Calculating Income for a Bank Statement Mortgage
Calculating total qualifying monthly income for a bank statement loan is done by an underwriter filling out a bank statement income calculator documenting the statement end dates. The following factors are determined when averaging the total eligible deposits:
- Statement end dates
- Total deposits
- Unsupported large/atypical deposits
- Non-self employed incomes, such as alimony, child support, SSI, employment, etc…
- Excluded deposits, such as credit returns, account transfers, credit card cash advances… etc
An underwriter will take all of these factors into consideration to determine total eligible deposits for the total qualifying monthly income for each account.
For example, for a 12 month bank statement program, consecutive personal statements from checking or savings must be used to determine the qualifying income and be consistent for the borrower’s typical line of work. For a 24 or 12 month bank statement loan, acceptable deposits are averaged.
Another Source Of Income For A Bank Statement Home Loan – Asset Depletion
Asset conversion can be used for qualifying income. Qualified assets for asset depletion can be:
- Mutual funds
- Vested amount of retirement account
- Bank accounts
For qualified assets, there is a conversion of each type of asset to calculate qualified income.
Bank Statement Mortgage Option With A Recent Bankruptcy Or Foreclosure
Purchase, refinance, and cash out options available for recent bankruptcies and foreclosures. 30 year fixed rates, 5/1 ARMS, 7/1 ARMS available with no prepayment penalty – ARMS are not permitted in Illinois Cook, Cane, Peoria, or Will counties.
Key qualifying factors are, but not limited to:
- Zero recent mortgage or rental history lates in the last 12 months or since the event.
- Foreclosure, short sale, deed in lieu, or modification seasoning is not required.
- Chapter 13 bankruptcy does not require any seasoning when discharged or dismissed.
- A chapter 13 bankruptcy remaining open must meet the following requirements:
- A repayment period of 12 months must be elapsed.
- All bankruptcy payment plans must be made on time.
- The borrower must receive written permission from the bankruptcy court to enter into the transaction.
- 620 minimum score when using alternative docs for the 12 month bank statement loan.
- Maximum debt to income is 43%.
For self employed borrowers that are eligible for a business and/or personal bank statement loan a borrower must be, but not limited to: self employed for at least 2 years, business must exist for 2 years, standard trade lines, parties on each bank account must be included on the loan, and statements must support stable and predictable deposits.
Nationwide Mortgage & Realty, LLC also has loan programs for investment properties that allow a property to close in an LLC, no personal debt-to-income is factored, and the property is based on debt-service coverage.