Bank Statement Loans South Carolina | serving SC & North Carolina
What are bank statement mortgages?
A bank statement loan, sometimes called a stated income loan, is a type of mortgage where you don’t need to show all the usual financial documents like tax returns and W-2s. Instead, you use your bank statements to prove your income. This can be useful if your income isn’t steady, or you have unique financial situations like claiming a lot of tax deductions
Non-Qualified Mortgages (non-QM)
Bank statement loans fall under the category of non-qualified mortgages (Non-QM). These loans do not meet the standard guidelines set by Fannie Mae and Freddie Mac. While they offer more flexibility, they often have higher interest rates and might lack some of the protections of regular loans.
How Bank Statement Loans Work
When applying for a bank statement loan, you’ll need to provide your bank statements from the past one or two years. If you have both personal and business accounts, you’ll need statements for both. Your credit score will influence your down payment and interest rate, and these loans may come with prepayment penalties.
Requirements for Bank Statement Loans
To qualify for a bank statement loan, you generally need to meet the following criteria:
1. Bank Statements:
Provide two years of bank statements.
2. Profit and Loss Statement:
Required if you run a business.
3. Down Payment:
Make a down payment of at least 10%.
4. Reserve Funds:
Have enough funds to cover several months of mortgage payments.
5. Credit Score:
Maintain a credit score of around 620 or higher.
6. Debt-to-Income Ratio:
Keep your DTI below 55% (some lenders prefer 45% or lower).
7. Additional Documentation:
Provide business licenses, organization documents, and other relevant paperwork.
Different Kinds of Bank statement Loans
Bank statement loans offer a range of options tailored to the diverse financial situations of borrowers who may not fit traditional lending criteria. Here are the different types of bank statement loans available:
Who Benefits from Bank Statement Loans
People who can benefit from these loans include small business owners, freelancers, and gig workers. Also, real estate investors with income from their investments can qualify. If your income is paid in unique ways, like prepaid cards instead of direct deposits, these loans might help.
How to Find Bank Statement Loans
If your current lender doesn’t offer bank statement loans, consider reaching out to a mortgage broker. Mortgage brokers have access to a variety of lenders who specialize in these types of loans and can help you find the best deals and terms available.
Bank statement loans offer a flexible alternative for those whose financial circumstances don’t fit traditional lending criteria. They provide an opportunity for homeownership even with unique income situations, ensuring you have access to the financing you need.
