Bank Statement Mortgage Programs For Self-Employed [2021]

 

Mortgage Options When You’re Self-Employed

Applying for a mortgage can be daunting when you're working for someone else, but even more so when self-employed although it doesn't have to be that way. Lenders will be considering the same things such as your credit score, assets and ability to repay. 
Because you are self-employed, there is some additional documentation required, however it doesn't have to e a hindrance as long as you are prepared. 

Bank Statement Mortgages 

This mortgage is an excellent option for a self-employed individual looking to Purchase or Refinance a Home and cannot provide "Traditional" Income documentation i.e., 2 yrs Tax Returns to qualify. Unlike most mortgage programs, the bank statement mortgage allows you to use your Bank Deposits instead of traditional income documentation. This Program is centered around the Self-Employed Entrepreneur, who generates income that may not be fully reflected on their Tax Returns.

How Bank Statement Mortgages Work

These mortgages are Portfolio mortgages that are not connected to any Government Agency. Approvals are heavily focused on your Bank Deposits into your Business or Personal Bank Accounts, coupled with a deep understanding of your Business's industry. How long you have been in Business, and how you derive your income. The focus is to understand your "Business."

What Documents Do You Need To Provide?

While underwriting standards will vary lender to lender and the type of loan you’re getting, the same types of documents are likely to be required. Here’s an overview of some of the common documentation needed.

• Up to 90% LTV on personal and business with no MI
• 12 month personal and business bank statements
• 640 Credit Score 
• 2 years self-employed required
• No tax returns required
• Loans up to $3 million

This product allows personal or business bank statements to calculate income without requiring tax returns.

• Available for purchase and cash-out or rate-term refinance

• Primary, second home, or investment properties
  • Single Family, townhomes, or condos
• 12 or 24 months business or personal bank statements required
  • Additional documentation will be required for qualifying income and loan approval

If you’re self-employed and eligible, it’s still a great time to apply for a home loan or refinance. Rates are incredibly low and expected to stay that way.  Our Bank Statement mortgage program is the perfect option for self-employed borrowers who need an alternative method to show the true cash flow of their business. Borrowers do not have to own 100% of the business.

Contact Us TODAY to see about qualifying! 

Aundrea Beach-Greco 

Mortgage Lender, CMPS 

NMLS 333739

📱 +1 702-326-7866

📧 info@aundreabeach.com

🌐 www.AundreaBeach.com

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Aundrea Beach-Greco, CMPS. Licensed Mortgage Loan Officer. NMLS 333739

702-326-7866 info@AundreaBeach.com

Find me online www. AundreaBeach.com

Apply online at www.iLendLasVegas.com

Can I get a mortgage post COVID being self-employed?

Lending guidelines can change.  During COVID we have seen some significant changes in tightening and availability of credit like we saw in 2008.  Housing is strong, the stock market is holding its own, interest rates are at historic lows yet the pressures of unemployment in America, the coronavirus pandemic haunting us and homeowners filing for forbearnace all weigh in on mortgage lending guidelines.

Recently as of June 2020, we have new "Temporary" guidelines for self-employed mortgage applicants.  Due to the continued impact of the COVID pandemic on economic conditions and businesses throughout the country, lenders have additional temporary requirements when assessing income derived from self employment in order to determine if the Borrower’s income is stable and there is a reasonable expectation of continuance.

The new word in lending for self-employed individuals is STABLE.  Is the income stable?

Mortgages are still available however its harder for self employed applicants to get approved and show "stable" income depending upon the nature of their business and where they are in the country.

Due to the pandemic’s continuing impact on businesses throughout the country, lenders are now required to obtain the following additional documentation to support the decision:

• an audited year to date profit and loss statement reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date; or

• an unaudited year to date profit and loss statement signed by the borrower reporting business revenue, expenses, and net income up to and including the most recent month preceding the loan application date, and two business depository account(s) statements no older than the latest two months represented on the year to date profit and loss statement.

• For example, the business depository account statements can be no older than Apr. and May for a year to date profit and loss statement dated through May 31, 2020.

• The underwriter must review the two most recent depository account statements to support and/or not conflict with the information presented in the current year to date profit and loss statement.

Otherwise, the underwriter must obtain additional statements or other documentation to support the information from the current year to date profit and loss statement.

NOTE:  The year to date profit and loss statement must be no older than 60 days old as of the note date consistent with current Age of Documentation requirements.

Underwriters must review the profit and loss statement, and business depository accounts if required, and other relevant factors to determine the extent to which a business has been impacted by COVID 19.

Calculating income for self employed is complicated at best for lenders and now these added requirements cause some uncertainty to ensure the applicant has stable income.

We are still underwrtitng and approving these loans daily, however I thought it was important for you to know whats going on if you're self employed applying for a home loan and the lender asks you for all sorts of extra items. Now you know why...

If we can help or you have income questions, please reach out.

Aundrea Beach-Greco
Mortgage Advisor, CMPS
NMLS 333739
702-326-7866
info@aundreabeach.com
www.AundreaBeach.com