When home buyers apply for a home loan, the lenders verify their income by using tax returns and W-2s. However, all home buyers can’t prove their income and assets this way. That does not mean that they will stop dreaming of their homes. What to do? Apply for bank statement home loans.
With this loan, you don’t require tax returns or any extensive documentation. You can verify your income with a bank statement and get approval for a home loan. But can anyone benefit from bank statement home loans in Houston? Well, no. Here is who can benefit from this loan –
Self-employed individuals are the most common borrower, who can easily qualify for a bank statement loan program. Although these individuals make an income, they can’t verify it using paystubs. And so, it is difficult for them to opt for other home loan programs. With bank statement loans, self-employed borrowers can purchase a property easily.
By providing lenders 12 months of bank statements that show the regular receipt of income, self-employed borrowers can get a loan for a home. To make sure that you can get this loan, you should have good or excellent credit, plenty of money available to pay your mortgage payment if your income falls through, and a good down payment on the house.
2. Seasonal workers
There are many people in the United States who work seasonally. It means they spend one season to earn the income of the entire year. Are you an employee? Is your work seasonal? Then, you can opt for a bank statement loan. Generally, a conventional lender will take what the borrower made in a season and then annualize it to see how much they have made in a year. It makes your monthly gross income smaller and your ability to qualify for a loan quite impossible.
With this loan, you can document your income with your bank statements. But you need to hold a seasonal job for at least two years to use the income. The lender will still annualize the income but can use any other income you bring in regularly with your bank statements.
3. Commissioned individuals
Commissioned employees generally get paid for making a sale. They bring in a certain percentage of the total amount of the sale. In case you are a commissioned employee, then it would be difficult for you to get approval for a traditional loan and fulfill your dream of homeownership.
Being a commission basis employee, you may have a lot of write-offs for the job. These write-offs will decrease the total amount of income you can use to get approval for a loan. When using bank statements to prove income, the lender will deduct fewer expenses from your income to give you a better chance of approval.
Are you a self-employed professional or a seasonal or commissioned-based worker? If yes, then you can easily get approval for a bank statement home loan. So, what to wait for? Opt for a lender and apply for the loan today!