Bank Statement Loans

What Are Bank Statement Loans?

Bank Statement loans evaluate a borrower’s ability to repay the loan by analyzing personal or business bank statements. This approach offers flexibility to those who may not fit the typical income documentation requirements.

Qualifying for a Bank Statement Loan

Bank Statement loans offer a flexible mortgage solution for those with non-traditional income streams. Whether you’re self-employed, a freelancer, or have other forms of irregular income, this specialized loan type could be the perfect fit for you. Below, we outline the most important factors involved in qualifying for a Bank Statement loan, detailing how we assess your financial stability through your bank statements.

1. Analysis of Bank Statements: Using 12-24 months of personal or business bank statements, we calculate your average, regular monthly deposits. Depending on if the bank statements are personal or business, an expense factor may or may not be applied. This figure represents your “qualifying income,” which is then used to determine how much you can borrow.
2. Credit Assessment: While bank statements are central to this loan type, we will still check your credit score and history. A strong credit profile can offer you better terms.
3. Debt-to-Income Ratio: Your calculated income is used to establish a debt-to-income (DTI) ratio. This measures your monthly debts against your newly assessed monthly income, impacting your loan eligibility and terms.
4. Property Evaluation: Similar to traditional mortgages, the property you’re interested in will be appraised. Lenders assess the property’s value to ensure it aligns with the loan amount you’re seeking.

Benefits of Bank Statement Loans

For many, the pathway to homeownership can be fraught with obstacles, especially when it comes to meeting traditional income verification requirements. Bank Statement loans offer an alternative, one that is particularly advantageous for those with unique or fluctuating income streams. Let’s break down the numerous benefits that make Bank Statement loans an attractive mortgage option.

• Expanded Eligibility: The most significant advantage of a Bank Statement loan is its broader eligibility criteria. Self-employed individuals, freelancers, and others with non-traditional income can use bank statements to qualify, thus bypassing conventional income verification methods.
• Flexibility in Income Calculation: Unlike traditional loans that rely on W-2s and pay stubs, Bank Statement loans offer the flexibility of income calculation based on your actual cash flow. This feature accommodates those who may have high income but also have high business expenses.
• Streamlined Process: The focus on bank statements can make the loan application process smoother. Go from application to approval much faster due to needing to provide less documentation.
• Higher Loan Limits: Depending on your financial situation, Bank Statement loans can offer higher borrowing limits compared to conventional loans. This feature is particularly useful for individuals looking to purchase a more expensive property.

Who Should Consider Bank Statement Loans

Bank Statement loans are not a one-size-fits-all solution, but they can be a game-changer for specific types of borrowers. If you’ve run into roadblocks with traditional mortgage options due to non-standard income, this could be the opportunity you’ve been looking for. Let’s identify the profiles for whom Bank Statement loans might be an ideal choice.

• Self-Employed Individuals: One of the most common beneficiaries of Bank Statement loans are those who run their own businesses. The flexibility in income verification allows self-employed borrowers to showcase their true earning potential, even if their tax returns don’t reflect it.
• Freelancers and Gig Workers: In the age of the gig economy, many people earn money from various sources. A Bank Statement loan accommodates this scattered income model, using monthly bank deposits as proof of earnings.
• Real Estate Investors: If you have significant income from real estate investments, this type of loan allows you to use your bank statements as proof of your revenue stream.

How to Apply for a Bank Statement Loan

Apply Online

1. Visit the website: Go to the online mortgage application portal at Amres.com.
2. Complete the application: Answer some questions about your homeownership goals and personal information.
3. Gather Documentation: Submit 12 – 24 months of personal and/or business bank statements.
4. Loan Processing and Approval: Amres will process the loan, conduct the appraisal, and provide a decision on approval.
5. Closing: After approval, you’ll proceed to closing. There, you’ll finalize the loan and become the proud owner of your new home.

Apply over the phone

1. Contact an Amres Loan Officer: Start by connecting with an Amres loan officer to discuss your needs and options.
2. Gather Documentation: Submit 12 – 24 months of personal and/or business bank statements.
3. Complete Application: Your loan officer will guide you through the application process, making sure all details are accurately provided.
4. Loan Processing and Approval: Amres will process the loan, conduct the appraisal, and provide a decision on approval.
5. Closing: After approval, you’ll proceed to closing. There, you’ll finalize the loan and become the proud owner of your new home.

Conclusion

Bank Statement loans offer a refreshing alternative to traditional mortgage products, focusing on practical income verification through bank statements. Whether you’re self-employed, a business owner, or investor, this loan type can provide a great solution for your homeownership goals.

At Amres, we pride ourselves on understanding the unique needs of each borrower. Our experienced loan officers are ready to guide you through the Bank Statement loan process, ensuring a seamless experience. Contact us today to discover how Bank Statement loans can transform your path to homeownership, and let’s embark on this journey together.