One of the challenges some families may have when seeking a mortgage is not showing enough income on paper via tax returns to qualify. Here’s some nuances about bank statement programs that might help you land a mortgage more successfully…
Traditionally when getting a mortgage, most mortgage companies are going to want your W-2s or your pay stubs for supporting income to get a mortgage. If you’re self-employed then you will usually want your tax returns. In most cases the problematic element of tax returns that makes getting a mortgage more difficult is that most mortgage companies want to blend two years of tax return income together. That means if you had a good year and a bad year the bad year will adversely affect your income in the income averaging.
There is a program that in some cases will allow you to get a mortgage filing self-employed for last five years wherein the lender uses the most recent year of income tax returns to qualify. That might help some families, but it’s still predicated on using your tax returns. Some mortgage offer bank statement programs, one such lender New American Funding offers such a program. The program is truly a bank statement for income documentation loan. Here’s some nuances about the program that might help you land a mortgage more easily
One year or six months of bank statements needed for supporting income
Program allows for getting a mortgage two years after a short sale bankruptcy or foreclosure
Loans to $1,000,000 and in some cases to $2,000,000
Minimum credit score 680
Up to a 50 percent debt to income ratio
25 percent equity minimum
Program can be used for a primary home, second home and for a rental property and allows for some cashing out.
If you’ve been turned away for a mortgage because you have a complex financial profile, this program could be a very flexible gap between bridging where you are financially right now and where you otherwise could be. Most traditional mortgages for a 30-year fixed rate loan supports rates presently in the low 4s This program supports rates in the high 4s.
If you’re desiring to purchase or refinance a house and have been turned away before, you owe it to yourself to at least explore the possibility of a bank statement program. The program is incredibly flexible and allows for out-of-the-box scenarios whereas most mortgage companies will throw in the towel. The key is to work with a lender who is willing and able to explore your loan no matter how unique challenging or complex it otherwise might be.
Scott Sheldon is a local mortgage lender, with a decade of experience helping consumers purchase and refinance primary homes second homes and investment properties. Learn more at www.sonomacountymortgages.com.