Bank Statement Loans: How Do They Work and Are They Right for You?

When you apply for a home loan, you typically need to submit a variety of documents – such as your tax returns and paystubs – so your lender can verify your ability to repay a mortgage. However, when you’re self-employed, own your own business, or don’t have a steady salary, this can prove to be difficult.

Thankfully, Veritas Funding offers a special type of home loan specifically for borrowers who may be in this situation: A Bank Statement Loan.

Also known as a Self-Employed Mortgage or Alternative Documentation Loan, A Bank Statement Loan allows borrowers to qualify for a mortgage by submitting their bank statements rather than their W-2s and paystubs. With higher loan limits than traditional loans and the ability to be used for a variety of transactions (such as purchasing an investment home or refinancing a current home), Bank Statement Loans can be a great option for non-traditional borrowers hoping to qualify for a mortgage.

A Bank Statement Loan:

• Provides loan amounts up to $3.5 million
• Offers 15, 30, and 40-year loan term options
• Offers fixed and adjustable interest rate options
• May not require mortgage insurance
• Can be used for a variety of transactions (purchase, refinance, primary home, investment home, etc.)

A Bank Statement Loan may be right for you if:

• You've been self-employed for at least two years
• Your credit score is 600 or above
• You have enough money saved to make a 10% down payment
• Your debt-to-income ratio is below 55%

If you want to apply for a Bank Statement Loan, you may need to submit:

• 12 or 24 months of bank statements (personal or business)
• Proof of any liquid assets
• Your business license (if you have one)
• A letter from your accountant (or whoever does your taxes) verifying your self-employed status

If you’re a freelancer, consultant, business owner, or simply someone who wants to apply for a mortgage without submitting paystubs or W-2s (all occupancy types are allowed), a Bank Statement Loan may be your perfect fit. And if you fit the criteria but don’t think your bank statements paint your complete picture? You may be able to qualify using our 1099 option instead, so don’t hesitate to submit an application regardless.

Not quite ready to apply? You can learn more about how to qualify for a Bank Statement Loan, our Bank Statement Loan income verification process, or our Bank Statement Loan Program in general by chatting with our digital assistant, Lydia, or by setting up a free consultation with one of our Bank Statement Mortgage Lenders. And if you don’t think a Bank Statement Loan is right for you, you can always learn more about our other loan programs (such as Conventional Loans and FHA Loans) by clicking here instead.