The bank statement home loan is back in action with a few updates due to market conditions. The bank statement home loans are once again very comparable to a conforming, high balance and jumbo loan. That said, they are Better than before with changes to the loan to value (LTV) allowance, Credit score requirement and income calculation. All of that considered, they are still a viable option for the business owner and self employed 1099 employee.
Current bank statement home loan requirements:
Maximum loan amount: $7,5000,0000
The max loan amount allowed is $7,500,000 but with that high of a loan amount, the loan to value is reduced to 65%
Maximum loan to value: 90%
With the loan to value at 90%, this is a great opportunity to get into your dream home with only 10% down payment. As loan amounts exceed $2,000,000 the loan to value does begin to decrease.
Minimum credit score: 620
The lowest allowed credit score is 620. The allowance not only effects borrowers with lower credit scores but also those who are looking for a high LTV who have a lower credit score. Currently, the highest LTV with the minimum credit score is 75%.
Income calculation: 12 to 24 month bank statements or 1099 only
The 12 to 24 month bank statement requirement has not changed but the actual income that can be counted and how that is calculated has. A prepared P&L or a letter from a tax preparer can be used to establish a borrower’s expense percentage. Now, there are industry adjustments to the expense percentage, depending on the industry the borrower is in, number of employees they have as well as other additional factors that effect the minimum expense.
- Example:
- If a borrower is a realtor, which typically has a low overhead, they can only count 90% of the total income deposits.
Bottom line: This is a great program for self employed and 1099 employees
The program requirements are changing on a regular basis. To stay up to date on these and all other programs. Send me an email and I will get you subscribed to my newsletter where I provide program updates regularly.
Ask me about our True stated income program. No bank statements, no P&Ls, no 1099s, no W-2s. This program is available to Self employed and W-2 borrowers
You can find us when you search for a lender near me.
