The post Best Bank Statement Only Mortgage Lenders by Sarah Horvath appeared first on Benzinga. Visit Benzinga to get more great content like this.
Benzinga readers love CrossCountry Mortgage and New American Funding as the best bank statement mortgage lenders.
Quick Look at the Best Mortgage Lenders for Bank Statement Only Loans:
- Best for Low Mortgage Rates: New American Funding
- Best for Non-QM Loans: Angel Oak Mortgage Solutions
- Best for First Time Home Buyers: CrossCountry Mortgage
- Best for Convenience: Rocket Mortgage
- Best for Online Account Accessibility: North American Savings Bank
When you think about the process of buying a home, you probably imagine months’ worth of searching for bank statements, income documentation, credit reports and endless other paperwork. This can be particularly annoying for self-employed individuals, who may not have traditional documentation that mortgage lenders need to see when proving your income.
Bank statement only mortgage loans, though not as common an option when buying a home, can provide you with an easier and more streamlined way to get a mortgage as a self-employed individual.
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The Best Bank Statement Only Mortgage Lenders
Though finding a bank statement only mortgage lender is more difficult than getting a conventional or government-backed mortgage loan, there are many lenders offering this option, including the following.
1. Best for Low Mortgage Rates: New American Funding
New American Funding offers conventional, proprietary and government-backed mortgages. Its variety of mortgage options make it worth checking out, especially if you have unique financial needs. It also offers options for refinancing and tapping into your home equity. Its products aren’t available to New York or Hawaii residents.
Best For
- Self-employed individuals
- Those with lower credit scores
- Those who want access to a variety of mortgage options
- Offers several mortgage options
- Website and app to manage your mortgage
- Educational resources like calculators, blogs and home buyer guides
- Not available in New York or Hawaii
New American Funding offers bank statement loans alongside additional qualification factors that you can use to get a lower interest rate without W-2 income documentation or tax returns. Some documents that you can use to qualify for a mortgage loan through New American Funding include:
- A business license
- A letter from your accountant verifying that you have been self-employed for the last 2 years
- Credit history documentation
- A signed profit and loss statement from your business
- Having between 6 months to a year’s worth of reserve cash for unexpected expenses
- Documentation of your retirement assets
Non-qualified loans from New American Funding are available with multiple terms and interest structures.
Pros
- Variety of mortgage products
- Competitive interest rates
- Strong customer service
- Educational resources
Cons
- Limited locations
- Stricter qualification requirements
2. Best for Non-QM Loans: Angel Oak Mortgage Solutions
Angel Oak Mortgage Solutions is a unique platform that allows you to get your mortgage with just a bank statement. However, the bank also allows you to take out loans using asset qualification, ITIN and more. You can also get FHA, conventional and jumbo loans along with loans for portfolio purchases.
Best For
- Bank statement home loans
- Multiple loan options
- Online information
- Asset qualifier home loans
- ITIN home loans
- Investor home loans
- Bank statement loans not available for all buyer types
Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio mortgage loans. Angel Oak Mortgage Solutions Bank Statement program is a loan option for eligible self-employed borrowers to purchase or refinance a home. This program allows personal or business bank statements to calculate income without requiring tax returns.
Pros
- Loans from $150,000 to $3 million
- Two years seasoning required for foreclosure, short sale, bankruptcy or deed-in-lieu
- Available for purchase, cash-out or rate-term refinance
- Primary, second home, or investment properties
- Single family, townhomes, or condos
- 12 or 24 months business or personal bank statement submissions
- 1099 income option available
- Non-warrantable condos allowed
Cons
- Two years of self-employment required
- 40 year fixed interest-only available
- Higher Interest rates
3. Best for First-Time Home Buyers: CrossCountry Mortgage
CrossCountry Mortgage offers standard products like conventional loans, VA loans, Jumbo loans and FHA loans. It also has more specialized products like bank statement loans, asset qualifier mortgages and no doc investment property loans. If you’ve had a hard time finding a mortgage due to erratic income, being retired or buying an investment property, CrossCountry Mortgage is worth a look.
Best For
- Self-employed professionals
- Retirees
- Investors
- Condo buyers
- Wide variety of mortgage products
- Niche products like bank statement loans
- Works with many state home buyer assistance programs
- No online approval
CrossCountry Mortgage’s Simple Access Non-QM Bank Statement Loan provides a unique option for self-employed individuals and freelancers to access higher mortgage loans without traditional income qualification documents. There are no W-2 forms or income tax returns required to get this kind of mortgage loan. Instead, you’ll only need to submit 12 months’ worth of bank statements with regular, recurring business deposits. You’ll also need a CPA to verify your business deposits.
The underwriting team at CrossCountry Mortgages uses the business deposits from your bank statements to determine how much money you can afford to take out in a loan by assuming that 50% of your total deposits are considered usable income. For example, imagine that you’re an independent contractor with bank statements proving that you had $120,000 in deposits last year. With a Simple Access loan, CrossCountry Mortgage would consider you to have about $5,000 worth of usable income each month, which the company uses to determine what you qualify for in a loan. Loans from CrossCountry Mortgage are available up to $3.5 million, and you can purchase everything from a single-family home to an investment property through this loan program.
Pros
- Diverse mortgage products
- Digital mortgage tools
- Multiple branches in the US
- Great customer service
Cons
- Mortgage rates not available online
- Mortgage rates and fees are higher than average
- No live chat option
4. Best for Convenience: Rocket Mortgage
Rocket Mortgage is one of the best mortgage lenders on the market, making it easy to apply for a home loan entirely online. Its streamlined preapproval process and quick access to customer service set it apart from other online lenders. Rocket Mortgage offers a large variety of mortgages and is backed by the largest mortgage lender, Quicken Loans. Whether you need help or know exactly what you’re looking for, Rocket Mortgage matches you with the right mortgage type and helps you quickly complete your online application.
Best For
- Homebuyers who are looking to complete the mortgage application process on their own
- Homebuyers who have found their dream home and are looking to move through the approval process quickly
- Homebuyers with good credit scores looking to review their mortgage options
- Current homeowners looking to refinance within the next few months
- Rocket Mortgage allows you to move at your own pace, guiding you through each step of the process. After you answer all the application questions, Rocket Mortgage lets you know if you’re approved and show your personalized mortgage recommendations
- You can submit checking and savings account information, tax returns and other financial documents online — a feature that sets Rocket Mortgage apart from online competitors
- RateShield allows you to lock in your Rocket Mortgage approved rate for up to 90 days
- The home loan application process can be completed in minutes, allowing you to find out if you qualify for a mortgage right away
- The online software allows you to navigate through the entire home buying process, from approval to home closing. Once you’re approved and you make an offer on your home, Rocket Mortgage offers online tools that will help you move through the rest of the closing process
- While Rocket Mortgage has customer specialists ready to answer your questions and provide guidance, if you prefer sitting across from a person when filling out financial forms, this lender might not be right for you
- You can’t easily view all of Rocket Mortgage’s home loan options prior to applying. It offers conventional, FHA, USDA and VA loans, but you’ll need to apply to find out more about the mortgage types within these offerings and which ones you’re eligible for
While Rocket Mortgage does not offer a specific loan that only requires you to submit bank statements in order to qualify, the lender does offer flexibility in its income verification. So long as you’ve been self-employed for at least 2 years, Rocket Mortgage can help you verify your full income and self-employment status using items like profit and loss statements and letters from your clients verifying the nature of the work you performed for them.
Rocket Mortgage can be a strong choice for you if you aren’t sure which type of loan you might need or qualify for. While you’ll need to submit more traditional income documentation in order to qualify for a government-backed loan, Rocket Mortgage’s representatives can offer personal advice and loan recommendations based on your unique business structure. From jumbo loans to VA loans, Rocket Mortgage offers a variety of loan choices and customization options ideal for individual considerations.
Pros
- Option to work with loan officer
- Quick and simple online application process
- Fast preapproval
- Mobile app
Cons
- Potentially higher fees
- Credit check for customized interest rate
5. Best for Online Account Accessibility: North American Savings Bank
North American Savings Bank is a unique company that offers a range of banking products. You can take out several different mortgage types, choosing from a range of competitive rates and mortgage styles. Because the range of mortgages is so large, you have a better chance of finding what you need.
Best For
- Military personnel
- Variety of loan products
- Quick closing
- Choose the loan that’s right for you
- Competitive rates
- Competitive fee structure
- Minimum credit score might be a bit high
Most mortgage lenders require that you have been self-employed for at least 2 years before you can apply for a bank statement mortgage loan. If you’ve recently begun your self-employment journey and your company is still in the process of getting off the ground, you might want to consider a bank statement loan from North American Savings Bank. Unlike most mortgage lenders, North American Savings Bank may allow you to take out a non-qualified loan if you have been self-employed for less than 2 years so long as you were previously employed in the industry you’re now working in and have documentation to prove your prior income.
Bank statement mortgage loans from North American Savings Bank are available from $200,000 to $1 million, and you must have at least 10% to put down on your home purchase. If you have a 20% down payment, you can avoid the company’s mortgage insurance requirement. You must also be able to provide 12 consecutive months of bank statements from the same account in order to qualify.
Pros
- Lower rates and fees
- Wide range of mortgage products
- Good online tools and resources
Cons
Limited geographic reach
Customer service could be better
How Do Bank Statement Only Mortgages Work?
Bank statement only mortgages work by allowing borrowers to use their bank statements as proof of income instead of traditional income documentation such as pay stubs or tax returns. This type of mortgage is often used by self-employed individuals or those with non-traditional income sources who may not have consistent pay stubs or W-2 forms. The borrower provides several months’ worth of bank statements to the lender, who then analyzes the deposits and withdrawals to determine the borrower’s income. The lender will typically average the income over a certain period of time, such as 12 or 24 months, to determine the borrower’s eligibility and loan amount. It is important to note that bank statement only mortgages may have higher interest rates and stricter qualification requirements compared to traditional mortgages.
Benefits of a Bank Statement Only Mortgage
Getting a bank statement only mortgage loan can be more difficult than finding a traditional mortgage loan. However, in some circumstances, it can be worth the extra effort to look for a low doc mortgage. Some of the benefits that come with a bank statement only mortgage loan include the following.
Easy to Collect Documents
As the name implies, a bank statement only mortgage loan allows your lender to use your bank statements as its primary documentation to determine whether you qualify or not. Unlike traditional mortgage loans (which may require tax documents, pay stubs and more) you can find the documents for a bank statement only mortgage loan relatively easily.
Based on Current Income
As a business owner, you likely try to do everything that you can to reduce your taxable income throughout the year in order to limit costs and ensure that you have enough funds in reserve to cover any emergencies that present themselves. Unfortunately, mortgage lenders usually use tax statements to qualify income from self-employed individuals, which means that the taxable income on your documentation may not accurately reflect the amount of money that you’re earning and that you can afford to spend on a home.
When your mortgage lender accepts bank statements in lieu of tax documents, you can get rates tailored to your current income and funds. This can help self-employed individuals continue to save money for tax-deductible expenses (like contributions to a retirement account, payroll and more) while also being afforded the opportunity to borrow more in a mortgage loan. This can also be beneficial if your income changes drastically from year-to-year, which is a situation that many business owners find themselves in.
Underwriting Takes Less Time
If you need to be out of your current space quickly, you may want to consider looking for a bank statement only mortgage loan. Because these loans require less documentation, the underwriting process can be completed faster on the end of the mortgage company.
Helps the Self-Employed Document Income
If you’re self-employed or you own your own business, documenting your income for your mortgage loan can be a time-consuming and difficult process. You may not have traditional W-2 filings or pay stubs to prove your income, which most lenders require for the mortgage process. If you’re an independent contractor, providing your income may require digging up dozens of 1099 forms, which can put a major toll on your business. A bank statement only mortgage loan helps you apply for a loan faster, eliminating the need to search for endless documentation.
Frequently Asked Questions
Are bank statement loans still available?
Though many mortgage lenders will now require you to submit more information beyond a series of bank statements in order to qualify for a mortgage loan, bank statement loans are still available in most areas. If you’re self-employed, you may want to consider beginning your search for a mortgage loan with Luxury Mortgage, New American Funding, Rocket Mortgage or North American Savings Bank using the links above. All of these companies offer easier options to get approved for a mortgage loan if you do not have traditionally documented income and must rely more heavily on bank statements.
How many months of bank statements do I need for a mortgage?
Most mortgage companies will require you to submit at least 2 months’ worth of bank statements when you apply for a loan in order to verify your income and be sure that the money in your account qualifies for use in your down payment calculation. However, if you’re self-employed, you may need to submit up to a year’s worth of bank statements before you can be approved for a mortgage.
What is an interest only bank statement mortgage?
An interest only bank statement mortgage is a type of mortgage loan where the borrower is only required to pay the interest on the loan for a specific period of time, typically 5 to 10 years. During this time, the borrower’s monthly payments consist only of the interest accrued on the loan, without any principal repayment.
The post Best Bank Statement Only Mortgage Lenders by Sarah Horvath appeared first on Benzinga. Visit Benzinga to get more great content like this.
