​​Bank Statement Loans – The Mortgage Program for the Self-Employed Business Owner

Bank statement loans help self-employed business owners  secure a mortgage. Often a self-employed applicant’s tax returns doesn’t show their true income, thanks to the advantageous tax code allowing them to write off many expenses. While it’s nice to lower your tax liability, it can hurt your chances of securing a traditional mortgage. 

Our bank statement loan program helps Florida residents secure financing at attractive rates and with flexible terms. At Fidelity Funding Mortgage Corp, we want self-employed borrowers to have as much of a chance of securing mortgage financing as the ​​employed​​ borrower. If you can prove you can afford the loan and we can prove the income with your bank statements, you’re on your way to becoming a homeowner. 

Here’s everything you must know about the bank statement loan. 

What is a Bank Statement Loan? 

The name says it all – we can use bank statements to qualify you for a mortgage rather than your tax returns, which are typically required for self-employed borrowers. If your tax returns show a loss, most lenders would turn you away. This is the case even with a profitable Profit & Loss. Lenders can only use the income claimed on your tax returns for qualifying. 

A bank statement loan bypasses the need for tax returns and instead focuses on the money you bring in monthly to qualify you for a mortgage in Tampa Bay, Florida. It works just like any other loan – you apply for and qualify for the loan and get the funding to buy a home, making your mortgage payments monthly. 

How Does it Work? 

With our Bank Statement Loan Program, we ask for the last 12 – 24 months of bank statements to prove your income. We look for regular monthly deposits that equal to the income you state you make running your business. We use the deposits as proof of your income and to come up with the figures used to determine your debt-to-income ratio, and how much you can afford. 

Whether we use the entire amount or a percentage of it depends on the industry you’re in and the regularity of your deposits. 

Our bank statement loan works on almost any property type including owner-occupied, second homes, and investment homes. 

The acceptable property types include: 

• Single-family homes
• Condos / Condominiums
• Townhomes / Villas
• Condotels

Like all mortgage loan programs, you must meet certain qualifying requirements for us to use your bank statements as income. 

Who Qualifies?

Our bank statement loan is for business owners throughout Florida with decent credit, yet don’t have traditional income and wouldn’t qualify for standard financing. To qualify for our bank statement program, you’ll need:

• Must be in business for a minimum of 24 months (2 years)
• Minimum 600 middle credit score
• Minimum 10% down payment
• Minimum 24 months since any housing events (such as a Foreclosure, Bankruptcy Discharge, Short Sale or Deed-in-Lieu of Foreclosure)
• Enough room in your budget for escrow payments (tax and insurance escrows are required.  In other words, your property taxes and homeowners insurance premiums are paid in your monthly payment) 

Like any mortgage loan, we’ll evaluate your qualifying factors to determine if you’re a good candidate for the bank statement loan. 

Because we don’t ask for tax returns, you don’t have to worry about skipping certain deductions you’re entitled to as a business owner and increasing your tax liability just to get approved for mortgage financing. 

Why Choose a Bank Statement Loan? 

Bank statement loans have pros and cons, like all other mortgage loans. If you’re self-employed consider the bank statement loan for these benefits:

• You can get mortgage financing without using your tax returns and/or you've been denied by your bank or credit union.
• You can continue to claim your business write-offs without losing your mortgage eligibility.
• You don’t need perfect credit
• You can buy a home with just 10% down
• Sellers can help you with up to 6% of the sales price in closing costs (2% for investment homes) 

Like any mortgage loan, there are downsides including:

• If you don’t make your payments you can lose your home
• You’ll need some money to put down (at least 10%) 

Bank statement loans have flexible guidelines and let you qualify without typical tax returns. It’s a nice reprieve for self-employed borrowers who already face so many different regulations and expenses since they don’t work for someone else. 

Are Bank Statement Loans Conventional Loans? 

This is the beauty of bank statement loans – they aren’t conventional loans so there is more room for flexibility. 

We are able to offer qualified borrowers simple underwriting guidelines to make it easy to qualify. Here are a few ways our bank statement loans are flexible:

• NO PMI - We only require a 10% down payment yet you don’t pay PMI. Conventional loans require PMI with a down payment of less than 20%. This saves you money on your mortgage payment and makes it easier to afford a home.
• We offer 30-year repayment terms, but with a variety of options. You can choose a 30-year fixed-rate loan, 5/1 ARM, or 7/1 ARM. You decide what option suits your budget the best or we can help you decide.
• There’s no prepayment penalty on owner-occupied or second homes. This means you can make extra payments as often as you want, pay the loan off early, or sell the home whenever you want. 

Bottom Line 

If you’re self-employed, consider the Bank Statement Loan program at Fidelity Funding Mortgage Group. We offer flexible guidelines and walk you through the process to make sure you understand the features, benefits and implications of securing a mortgage. 

We want self-employed applicants to have just as easy of a time qualifying for a mortgage as other applicants. If you have decent credit, a 10% down payment, and the income to cover the mortgage payment and your other debts, you’ll be a good candidate for our bank statement loan. 

If you’re ready to see if you qualify for a bank statement loan as a self-employed borrower, contact us today, and let’s get started.  If you're a self-employed business owner, remember -- Stop letting these banks and credit unions tell you NO, when we have more reasons to say YES.

For even more information on our BANK STATEMENT PROGRAMS, CLICK HERE. 

WRAPPING UP...

As always, if you’re looking to purchase, refinance or get preapproved to purchase a home anywhere in the state of Florida, we’d love to help.  Simply give us a call so we run some numbers for you and answer all your questions! 

You can also drop us a line HERE »

Yours in successful homeownership,

Derek Bissen
Loan Originator
NMLS#365627
Unconventional Lending Program Director