Bank statement loans allow self-employed borrowers to apply for a home loan without having to provide pay stubs and W-2’s from the past two years of employment. Lenders look at the borrower’s bank statements to determine if they can produce sufficient income to warrant approval for a mortgage loan.
A bank statement program is a home loan program that uses bank statements to calculate a borrower’s income. This is an alternative documentation loan type instead of using tax returns and W-2s in the qualification process. These loans are for self-employed borrowers who typically have substantial tax write-offs that make it challenging to demonstrate the necessary income to prove their ability to repay the loan. The bank statement loan programs use either personal or business bank statements to qualify borrowers.
Bank statements cover a specific period of time, such as 12 to 24 months, and show a consistent income stream. Interest rates on Bank Statement are higher than traditional...
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