If you do not have a W-2 form or not all of your income is shown on your W-2, you can purchase a home or refinance by applying for a bank statement loan. If you have never before applied for a bank statement loan, you may have many questions about them. Below, we answer some of the most frequently asked questions we receive about bank statement loans.
Bank Statement Loans FAQ’s
Q: Can I get a loan with a bank statement?
A: Yes. It is possible to apply for a mortgage using a bank statement and no W-2 form. This lending product is called a “bank statement loan,” “self-employed loan,” or “self-employed borrower loan.”
Q: How do bank statement loans work?
A: You provide us with your bank statements. The lender assesses your income using the information in your bank statements to determine whether you are a suitable mortgage candidate.
Q; What is required for a bank statement loan?
A:When you apply for a bank statement loan, you will need to provide between 12 and 24 months of statements. These need to span the most recent consecutive period. While the bank statements will answer questions about your income, you will also need to demonstrate that you have been self-employed over the past two years (or the past year, with relevant employment for the year prior). Lenders will also look at your credit score, debt-to-income ratio, and assets. You also may need to provide some additional documentation, such as your business license and a letter from your tax preparer.
Q: Who should get a bank statement loan?
A: You should get a bank statement loan if you work for yourself and do not have a W-2. You might call yourself an entrepreneur, self-employed individual, business owner or freelancer. Investors may also benefit from applying for bank statement loans since much of their income may not be documented on a W-2 form.
Q: What banks offer bank statement loans?
A: Not all banks or lenders offer bank statement loans. Big box companies often do not specialize in this type of lending product. Smaller local companies that take a personalized approach to lending are more likely to offer bank statement loans.
Q: How long do bank statement loans take?
A: It takes around the same amount of time to process a bank statement loan as it does a traditional loan. In some cases, they might even be faster since there is a streamlined process in place for the paperwork.
Q: Can I buy a second home with a bank statement loan?
A: Yes, you can use a bank statement loan to purchase a primary residence, second home, vacation home, or investment property.The purpose of bank statement loans is to make it possible for people who are self-employed to purchase a home. Not having a W-2 should not prohibit you from purchasing a second home anymore than it does from buying a primary residence. And thanks to the bank statement loan process, it does not have to stand in your way.
Q: Can I refinance with a bank statement loan?
A: Yes, you can refinance with a bank statement loan. Again, not having a W-2 in no way makes you an unsuitable candidate for refinancing your mortgage. Once you provide your bank statements during the refinancing process, lenders can make a determination about the rates for which you qualify.
Get Answers to All Your Bank Statement Loan Questions
Do you have additional questions about bank statement loans we did not answer here? Martini Mortgage Group is here to give you the detailed answers you need to move forward with the lending process as a self-employed individual. To ask us your questions, please schedule a consultation by giving us a call at (919) 238-4934. We work with self-employed homebuyers and homeowners in Raleigh and throughout North Carolina, as well as Florida, South Carolina, Georgia, Illinois, Tennessee and Virginia.
Do you know how much home you can afford?
Most people don’t... Find out in 10 minutes.Today's Mortgage Rates