While granting a mortgage, mortgage lenders examine the borrower’s source of income. As a rule, verification is carried out on the basis of W2 tax forms. However, this can be a problem if you work as an independent professional, such as a freelancer. Actually, freelancers, owners, freelancers, and entrepreneurs do not have tax forms to fill out. That’s where bank statement mortgages come in.
See how it works here. All you have to do is prove your source of income by showing data for one or two years. Keep reading to learn more.
What is a Bank Statement Mortgage?
With a bank statement mortgage, the lender can verify your income using a bank statement instead of a tax form. Traditional mortgages require borrowers to file tax returns, for example for audit purposes.
On the other hand, mortgage seekers can opt for loan details.
Whom do I approach for Bank Statement Loan?
If you fall into one of the following categories, you can use your bank details to apply for a mortgage.
People with irregular incomes like:
1. free or on-demand
2. people with seasonal income
3. independent contractors
4. independent candidate
Bank statement loan types
Depending on your situation and the lender, you can choose from a variety of programs. Although most lenders ask for at least one year of details, some may not require more details. However, if you submit a statement of 2 years, you can negotiate better terms and rates.
Now, if you do not have valid business details to submit, there is another option: You can submit a personal statement. For qualifying purposes, they may use a small percentage of your deposit.
Sometimes you may need to file a business tax return to get a loan.
How to get a bank statement Mortgage?
Generally, mortgages with bank statements fall under the category of “non-qualified mortgages.” This is because they do not meet traditional lending standards. Not all lenders offer these mortgages. In fact, many credit unions and banks do not offer these loans.
In this case, you should find a lender specializing in home loans. Also, if you don’t qualify for traditional mortgage financing, you can contact several lenders to find out if they can take statements for this service.
Don’t forget to ask about the requirements for professional and personal declarations. It will also include questions about the reporting period. Other important issues may relate to interest rates and payment requirements.
What are mortgage rates?
If you are a self-employed, seasonal worker, consultant, freelancer, tax preparer or artist, you can apply for a statement loan to suit your needs.
When it comes to interest rates, down payment requirements vary by lender. Hence, it is best to shop around to get the best deal.