New Bank Statement Loan Programs | Valor Lending Group
Are you self-employed and looking to acquire a loan?
Are you interested in learning more about Top Bank Statement Loans?
Bank Statement loans are ideal for self-employed borrowers. Self-employed individuals run into issues when trying to secure a mortgage loan because of the substantial write-offs on their tax returns.
The Bank Statement Loan program allows those individuals to receive a home loan without using tax returns or W2’s. When using the Bank Statement Loan program, they look at 12 to 24 month bank statements to determine your income, and with that they establish if you meet the criteria.
Valor Lending Group has helped many get the mortgage loans they need to fulfill whatever desired project they are embarking on. Valor Lending Group works with the absolute best to provide you with the top-notch service you are looking for. We will go above and beyond to get you the most competitive rates and you will experience a level of customer service that will have you coming back for more when you need our expertise.
What you will learn:
- What a Bank Statement Loan is
- Why you would want to use a Bank Statement Loan
- The Difference
- Qualifying
- Pros and Cons of Bank Statement Loans
- Bank Statement Loan highlights
- What you need for submission
- Recap on our loan programs
What Are Bank Statement Loans?
These are not the type of loans that were prevalent in the pre-2008 financial crisis, and no longer are the days in which loan applicants can simply state their income on a loan application with virtually no due diligence conducted by the lender. After the 2008 financial crisis, the sweeping provisions of Dodd-Frank changed the industry substantially, at least in the owner-occupied residential context. Since 2010 Dodd-Frank has required lenders to document a residential borrower’s ability to repay the loan. Bank statement lenders still want to ensure borrowers can repay their mortgages; they just use bank statements to verify income as opposed to tax returns. Self-employed borrowers are able to document their ability to repay based on business deposits into their personal or business bank accounts, i.e., their true cash flow.
Why Use Bank Statement Loans?
1) The Difference
Traditional mortgage lenders require tax returns, W-2s, and paycheck stubs in order to determine monthly income. For salaried and hourly borrowers, the lenders look at gross income for qualifying purposes. But for self-employed borrowers, traditional mortgage lenders look at net income, the adjusted gross income showing on tax returns. This puts self-employed borrowers at a disadvantage because the typical self-employed or 1099 employee will write off as much expense as possible from their gross income on their tax returns to minimize how much they owe once tax season comes around. Borrowers still must qualify based on the income deposited over a given period, typically verified on 12 or 24 months of bank statements.
The total deposits in the bank statement period are the gross income used. Once this number is established, the debt to income ratio or DTI is derived (based on the income against the new mortgage payment and current monthly minimum debt obligations i.e. credit card, car loan, student loans, etc.) to ensure the borrower can afford the addition of the mortgage loan payment. If all aspects of the borrower’s finances are within the program requirements and a DTI no higher than 55%, the lender will be able to underwrite and finance the loan. These loans are repackaged and sold on the secondary market just the same as traditional mortgage financing.
2) Qualifying
This is an incredible and expanding area of mortgages that levels the playing field for self-employed and 1099 employee borrowers, providing the opportunity to qualify without tax returns. These types of loan programs can be used for both owner-occupied, and non-owner-occupied 1-4 unit properties, the same as traditional financing allows. The best bank statement loans, borrowers still must qualify based on the income deposited over a given period, typically verified on 12 or 24 months of bank statements.
The gross amount deposited in the given amount of time is then considered their “gross income”. Once this number is established, the debt to income ratio or DTI is derived (based on the income against the new mortgage payment and current monthly minimum debt obligations i.e. credit card, car loan, student loans, etc.) to ensure the borrower can afford the addition of the mortgage loan payment. If all aspects of the borrower’s financial is within the program requirements and a DTI no higher than 55%, the lender will be able to underwrite and finance the loan.
These loans are repackaged and sold on the secondary market just the same as traditional mortgage financing. This is an incredible and expanding area of mortgages that levels the playing field for self-employed and 1099 employee borrowers, providing the opportunity to qualify without tax returns. These types of loan programs can be used for both owner-occupied, and non-owner-occupied 1-4 unit properties alike the same as traditional financing allows.
Pros and Cons to Bank Statement Loans:
1) Pros of Bank Statement Loans
- No tax returns required
- Allows self-employed individuals and 1099 contractors to qualify
- Qualify even if the business is showing a loss
- Comply with Dodd-Frank and receive all appropriate borrower protections
2) Cons of Bank Statement Loans
- Must be in business for at least 2 years, showing the steady flow of deposits
- Not available to salaried borrowers (although non-self-employed co-borrowers allowed)
- Rates are slightly higher than traditional mortgages (but not more)
- None of the government programs (such as FHA, VA, or USDA) apply
Bank Statement Program Highlights:
- 12 and 24 month Bank Statement options available.
- Up to 90% LTV (on Purchases & R/T Refinances)
- Borrower and Lender paid points available.
- Must have 2 years verifiable self employment income.
- No Tax Returns
Submission Check List | Bank Statement Loans:
- 12-24 Months Bank Statements (business or personal)
- Copy of Business License (3 years)
- CPA Letter (stating you are 100% owner, you have been in business for 2 years and they have done your taxes for two years | Also list your current expense ratio and the CPA License Number)
- Purchase Contract (for purchase)
- Current Mortgage Statement (for refinance)
- Hazard Insurance Dec Page or New Quote for purchase
- Copy of your Driver License (front and back)
Valor is STILL FUNDING Bank Statement Loans for California residential properties.
Most lenders have suspended their Non QM Loan Programs.
We are Non QM Specialists! No tax returns!
With our bank statement loans, we use 12-24 months bank statement cash flow for self employed borrowers and business owners.
CALL ME NOW for immediate attention to your scenario.
Recap of our Loan Products:
- Hard Money Loans (20% down / minimal documentation) Typically Fund in 7-10 days.
- Stated Income Loans (Great for business owners and self employed ) No tax returns!
- 100% financing is available (we can cross collateralize other properties if there is enough equity)
- Valor VA Home Loan 100% financing up to $1.5MM
- Investor Cash Flow Loan – No tax returns or DTI calculation! Based on subject property cash flow
- Flipper & Rehab Loans (Flip a property with one of our many options)
- 2nd Position Loans up to $5mm
- Raw Land & Lot Loans
- Ground up Construction for spec homes, custom homes and commercial ground up.
- Farms, Vineyards, Ranches and Agricultural Properties (25-30% down)
- 5% down Jumbo’s with NO MI up to $2mm / 10% down up to $3mm
- Manufactured Housing / Mobile Homes (20% down / 600+ credit score)
- Acreage Properties
- Commercial Loans up to $500mm
- 3% & 5% down Conventional Loans– LPMI (Lender paid mortgage insurance)
- Foreign Nationals Loans (no social security or residency required)
We also offer:
- 10, 15, 20, 25, 30 year Fixed, Conventional Conforming Loans (under $510,400)
- High Balance Conforming aka Super Conforming (from $510,400-$765,600)
- Jumbo’s to $10 Million / Super low rates! / 10% down Jumbo to $3mm
- FHA, USDA
- ARM’s
- Reverse mortgages up to $1 Million Value
- Refinance including Cash Out
CONTACT ME TODAY for immediate attention to your scenario!
**Rates and terms subject to change without notice**
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