Self-Employed Mortgage Solution
Bank statement mortgage is the solution for self-employed borrowers looking to maximize the purchase power, cash out or refinance mortgage. If you are looking to qualify based on your business bank statements vs. traditional tax returns this is the program for you. Borrowers does not have to own 100% of the business to qualify. This product allows the underwriter to review the true cash flow of your business vs. tax returns limiting your purchase power.
Self-Employed Home Loans in 2022
Self-employed borrowers have been getting the short end of the stick for quite some time, especially when the banks say they do not earn enough income to qualify for a loan. Because banks use the borrower’s tax returns to calculate the qualifying income, many self-employed borrowers cannot qualify for the home they desire. Since most business owners write off a lot of their income in the form of business expenses, this usually reduces their overall income available for a mortgage qualification. However, looking at the health of their business in the form of deposits made into their business bank accounts provides a more realistic view of the borrower’s income.
The bank statement program launched about 10 years ago and there have been several updates to it throughout the years. A bank statement loan averages the overall deposits into a borrower’s business account over a period of either 12 or 24 months, and then a deduction is made what they call an expense factor. The expense factor is a percentage of the revenue generated by the business that would be allocated toward the costs of running the business, with the default amount usually being 50%. Recently these programs have become more flexible to allow borrowers to maximize their income by allowing the use of up to 80% of the deposits into the qualifying income, depending on the type of business the borrower operates. In turn, this gives self-employed borrowers more purchasing power as they are able to qualify for higher loan amounts. This is a significant benefit for self-employed borrowers versus the traditional method banks use where they only calculate the taxable income on the tax returns for qualifying.
Some of the basic requirements for the bank statement program are a minimum credit score of 580 and that the borrower has been self-employed for at least two years. The minimum down payment options can vary from 5% to 15% down depending on the type of property and what it will be used for (i.e. primary home or investment).
You should contact your local mortgage broker to find out details so you can make an informed decision.
Self Employed Mortgage Pros and Cons
No tax returns required
Low down payment compared to bank options
Lower credit score requirements
Qualify for a higher purchase price
Minimum 2 years of self-employment
Full copies of 12 to 24 month bank statements
Interest rates might be slightly higher than traditional financing
We provide self-employment loans throughout the state of Florida including but not limited to the areas below.
Aventura • Coral Gables • Doral • Hialeah • Jacksonville • Orlando • Tallahassee Tampa •
Up To 90% LTV | Loan To Value | No Mortgage Insurance | Credit Scores Starting At 600
Loans up to 10 million with 200k minimum loan amount
10% down on primary home purchase up to 3 million, NO mortgage insurance
Two year self-employed required
12 to 24 month business or personal bank statements
30, 20, 15 year fixed or ARM available
Interest only products available
Purchase, cash out or rate and term refinancing
Owner occupied, second homes and investment available
Non-Warrantable condos allowed
Two years seasoning for foreclosure, short sale, bankruptcy or deed in lieu
Borrower can own as little as 50% of the business for the business bank statement mortgage and 25% for personal bank statements