Bank Statement Mortgage: What You Need to Know

A bank statement mortgage is a type of mortgage that allows borrowers to qualify for a loan based on their bank statements instead of their tax returns. This can be a good option for borrowers who have self-employment income or other non-traditional income sources.

To qualify for a bank statement mortgage, borrowers typically need to meet the following requirements:

Bank Statement Mortgage: What You Need to Know

• Have a good credit score (usually 620 or higher)

• Have at least 12 or 24 months of consistent income

• Be able to afford the monthly mortgage payments

• Provide 12 or 24 months of bank statements

The process for getting a bank statement mortgage is similar to the process for getting a traditional mortgage. However, borrowers will need to provide their bank statements to the lender, who will use them to calculate their income and debt-to-income ratio. Here are the steps involved in getting a bank statement mortgage:

1. Get pre-approved for a mortgage. This will give you an idea of how much you can afford to borrow.

2. Find a lender that offers bank statement mortgages.

3. Provide your bank statements to the lender.

4. Go through the underwriting process. This is where the lender will review your financial information to determine if you qualify for a loan.

5. Close on the loan. This is when you will sign all of the paperwork and officially become a homeowner.

Bank statement mortgages can be a good option for borrowers who have self-employment income or other non-traditional income sources. However, it is important to note that these loans typically have higher interest rates and fees than traditional mortgages. Here are some of the pros and cons of bank statement mortgages:

Pros:

• Can be a good option for borrowers with non-traditional income sources

• May have lower credit score requirements than traditional mortgages

• Can be a faster and easier process than getting a traditional mortgage

Cons:

• Typically have higher interest rates and fees than traditional mortgages

• May require more documentation than traditional mortgages

• May not be available from all lenders

If you are considering a bank statement mortgage, it is important to talk to a lender to get more information and to see if you qualify. Here are some additional tips for getting a bank statement mortgage:

• Get your finances in order before you apply. This means having a good credit score, a steady income, and a low debt-to-income ratio.

• Shop around for a lender. There are many lenders that offer bank statement mortgages, so compare rates and fees before you choose one.

• Be prepared to provide documentation. The lender will need to see your bank statements, tax returns, and other financial documents.

If you are a borrower with non-traditional income, a bank statement mortgage can be a good option for you. However, it is important to do your research and understand the risks involved before you apply.