Bank Statement Home Loan Programs Work Well for Self-Employed

November 30, 2021 by Cindy Steelman

If you are ready to apply for a mortgage and you’ve been doing your research, you are likely aware that proof of income is a major factor in the approval process. If you are self-employed, it is reasonable to wonder how you might verify your income without the traditional paystubs. One option in this scenario is approval based on bank statements. Generally speaking, lenders will want to see two to three years of personal bank statements and three months of business bank statements. Verifying income based on bank statements rather than pay stubs and W-2s is an option available to you, and there are programs that can streamline this process.

Who Is A Bank Statement Loan Right For?

Bank statement loans are the right fit for anyone who needs to verify their income without a W-2. This might include entrepreneurs, investors, business owners, or freelancers. People who have a W-2, but are maximizing deductibles for business expenses, may also benefit from a bank statement loan because these write-offs make their income appear lower than it is. It may also be the right fit for you if yours is a multiple-income household where some of the income is verifiable with a W-2, but other streams of income are not and are essential to qualify for the loan amount you are seeking.

What are the Benefits of a Bank Statement Loan?

Other than the obvious benefit of not requiring pay stubs or a W-2, a bank statement loan requires less information, which means the approval and escrow process are more streamlined. Altogether, a bank statement loan requires less paperwork, which tends to result in a faster escrow, since there is less information to collect, process, and verify.

How Can I Qualify for a Bank Statement Loan?

While different scenarios and lenders will vary, generally speaking, a lender who approves you for a bank statement loan will want to see two to three years of personal bank statements, and three months of business bank statements (where applicable). These will help verify debt to income ratio, consistency of income, and income history.

Can I Get A Bank Statement Loan for My Refinance?

The short answer is: yes! A refinance is very much like a new mortgage, and bank statement loans are possible for it. Working with us will mean a more customized approach in comparison to a big box lender.

What Terms Can I Expect with a Bank Statement Loan?

Bank statement loans do come in a variety of types, so you can speak with your mortgage broker about which might suit your needs best. You will likely come across 30-year fixed and ARMs with a range of terms. Interest rates do tend to be slightly higher on a bank statement mortgage, and as a non-QM loan they are not regulated the way other mortgage programs are. This makes shopping around even more important.

To read a little more about what a bank statement loan is, and how we can help, check out this article. Not all lenders will be able to offer a bank statement loan, so you’ll need to work with the right lender, who will be well informed about and experienced with bank statement loan programs.

For more information on mortgages and home loans in Roseville CA or refinancing services for the entire Placer County California area or tips on buying a home, contact my office below or call me any time at (916) 847-7263

More Information for Homeowners

How To Know How Much Equity I Have In My Home

How Best to Take Advantage of Your Home Equity Gains

3 Ways to Know if Refinancing is Right For You

What is the Minimum Down Payment on a House?

How Much Down Payment Do You Need When Buying a Rental?

Who Can Benefit from Bank Statement Home Loans in California?

January 13, 2021 by Cindy Steelman

California is a great state to live in for many reasons. You get to enjoy a great climate in most places, all while enjoying cultural diversity and plenty of progressive policies that make it the dream destination of most people. However, buying a home in the area can be challenging for many new homeowners. Still, most places in California have been well-developed and are ready for inhabitants to stay for long periods.

First-time homebuyers in Roseville might experience challenges with the whole process, which can be off-putting when they can’t find the right deals. Any place has its respective markets, and these can vary depending on a multitude of factors. However, before making any moves, it pays to consider the investment you’re making on a residential property in California.

Bank Statement Home Loans in Roseville

Securing home loans in Roseville is quicker than you might think, as there are plenty of lenders available to first-time buyers. While some might not meet the requirements of other loans like jumbo loans or conventional ones, bank statement loan programs can be of assistance. Plenty of factors play into how a person can secure the best rates for their mortgages, such as credit history, debt-to-income ratio, and other factors that determine financial responsibility.

Roseville is home to plenty of new developments, making it a destination for many young professionals and entrepreneurs. While it can be a daunting task to secure home loans, bank statement loans can be used nowadays to secure financial assistance to purchase a property. This system works by verifying income with bank statements instead of pay stubs or tax return documents. If you find that you have a good credit score but lack substantial income on your federal tax returns then, bank statement loans are a prime choice.

Seasonal Employees and Bank Statement Home Loans in Roseville

Some people working in seasonal industries might not have a steady income all-year-round to sustain traditional home loans. These people might take odd jobs due to not being currently employed, while others might freelance to help pay the bills. Nonetheless, taking on a conventional loan will divide the value of your annual payments into 12 months and not six. This spread makes it nearly impossible to secure a traditional loan because it results in a high debt-to-income ratio.

However, with bank statement home loans in Roseville, using your income per month can secure you a deal with a lender. You need to be working for the seasonal company for at least two years to qualify, but this is an excellent option considering how large home payments can be for those with varying income throughout the year.

Commissioned Work and Bank Statement Loans

Commissioned workers are more prevalent nowadays, as the industry is significant for people who need work done via freelancing. Since freelancing never brings home an equal amount of money for each commissioned piece, it can be challenging to secure a conventional loan. Some months can have exorbitant amounts of money, while other months are stale. The gig isn’t a steadily paying job with a monthly salary however it can be averaged over 2 years by using your federal tax returns. However, if your income on paper is too low then the bank statement program is something to consider.

Home Loans Expert in Roseville: Steelman Mortgages

Bank statement home loans in Roseville can help those who are young and new to the workforce. Without the need for a comprehensive set of documents to prove that you qualify for lenders’ money, this is best for those who have decent-to-good credit scores and unique job situations. Contact your local lender today to help you with the first-time home buying process.

Steelman Mortgages is a top mortgage company in Roseville, California who can help with home loans of all kinds. Secure your dream home in the beautiful West Coast by contacting our brokers today! Call (916) 847-7263 for more information.

Why Your Bank Statements Will Affect Your Mortgage

November 20, 2020 by Cindy Steelman

Bank Statement Loan Tips In Roseville California

A first-time homebuyer in Roseville, or anywhere, knows that there is quite a bit of paperwork involved. You can’t really avoid this, no matter how much you try. Applying for a mortgage can be particularly daunting but at Steelman Mortgages we make it easy.

One of the your important documents a lender will ask for is your bank statements.

Do you know what this tells your mortgage lender in Roseville, aside from what you spend in a month? Quite a lot.

Bank Statements

Bank statements are documents that are issued either monthly or quarterly, which give a summary of banking activity. These are sent through USPS, e-mail, or sometimes both. Banks generally give you statements so that you can keep better track of your funds and, should there be inaccuracies, report them in a timely manner.

If you have both a checking and savings account, activity from both will likely be in the same singular statement. This also summarizes how much money is in your account and shows a rundown of activities throughout a set period.

If you are self-employed, in addition to bank statements, you must have your federal tax returns submitted. If you are working in a company, then you are on a payroll, which means you would have to provide recent pay stubs alongside W-2s and your federal tax returns.

“Underwriting” is a process that lenders use to analyze your documents and they will give you an approval or a denial depending on many factors. One is verifying your bank statements wherein underwriters do research and assess the risk level you pose. Red flags can pop up during this phase, if there are any, such as a low savings account balance, overdrafts, and unstable income. A sudden deposit of a large amount is a major red flag, as it may be a loan that doesn’t reflect on your credit report.

This is important because your down payment is meant to prove that you are a responsible borrower with savings towards a down payment from a steady income. Once that is done, your lender will give you a definitive yes or no.

Sourced and Seasoned

It’s not just about having bank documents to present; it’s what the bank statements themselves contain. Any mortgage lender will always be looking to see if the assets contained in your account are “sourced and seasoned.” By that, it means they know where your funds are coming from (“sourced”) and that these funds have been in your bank account for some time, not just suddenly dropped in there (“seasoned”).

Both factors essentially assist in fraud avoidance. This also gives your lender all the assurance they need to see that you are not using a loan to make a down payment. Therefore, at least two bank statements (all pages) are required.

Steelman Mortgages: Your Roseville Mortgage Broker

Essentially, your bank statement serves as a way for your lender to verify that you have enough funds to make the monthly payments. It also lets them know that you can cover a down payment and any closing costs required.

Looking for a reliable mortgage company in Roseville and throughout California? Steelman Mortgages is here for you. Call us at (916) 847-7263!