Bank Statement Loans | Self-Employed Home Loans

Getting a mortgage when you’re a business owner can be tough.

But it shouldn’t be impossible.

Bank statement loans might be your best solution to consider if you’re a business owner looking to buy or refinance a home.

When you’re self-employed you do your best to take full advantage of the tax write-offs you’re entitled to. One of the only times those significant write-offs becomes an issue is when you’re looking to finance a home.

Most lenders will take a look at your tax returns and tell you that you don’t qualify for a mortgage because you just don’t show enough income on your tax returns.

There is a better way.

When getting approved for a portfolio loan you have an opportunity to get evaluated from a common sense standpoint. Your bank statements are collected from a 12-24 time period and deposits are added and averaged. Also you’ll need a 12 month profit and loss statement.

Bank Statement Loans Highlights

20% down minimum
600 credit score minimum
Available on primary residence, 2nd home, and investment property.
Interest only option available
12-24 month bank statements are required.
Personal and business bank statements.
CPA or third party tax preparer to provide statement of expense factor.
Available on purchase and refinance.
Must be at least 2 years from major credit issue (bankruptcy, foreclosure, short-sale, etc.)

Each scenario is evaluated individually. There is no cookie cutter circumstance.

Bank Statement Loans | For Self-Employed or 1099 borrowers

3 Ways to Get Approved

Personal Bank Statements

1. - Get 12 months personal bank statements – All pages
  - Review deposits, make sure that they have all come from the same source. Random cash deposits cannot be used.
  - Need to see deposits coming from a business account or related to business.
  - Proof been in business at least 2 years
  - Letter from CPA stating percentage of ownership in the business, and how long borrower has been in business.
  - Get 3 months bank statements for all businesses owned (to show proof of deposits on personal bank statements)

Business Bank Statements – 50% Expense Factor

1. - Get 12 (prefer 24) months business bank statements – All pages
  - Review deposits
  - Subtract by 50% (example: if deposits are 100K, subtract by 50K, and your income is 50K)
  - Letter from CPA stating percentage of ownership in the business, and how long borrower has been in business.

Business Bank Statements – Actual Expense Factor

- Get 12 (prefer 24) months business bank statements – All pages
- Review deposits
- Letter from CPA stating percentage of ownership in the business, expense factor, and how long borrower has been in business.
- Subtract income found on bank statements by whatever expense factor the CPA confirms in letter.

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Key Points on Bank Statement Loans