At San Diego Purchase Loans, we take pride in creating home-financing options for a wide-variety of borrowers and aspiring homeowners. To meet this goal, we provide a selection of high-quality mortgages that create access to affordable mortgages.
Bank statement loans are one of the top options, opening new financing choices for borrowers from man different walks of life.
These loans create world class lending options. They provide loan amounts up to $10 million for certain borrowers, and in other circumstances borrowers can use just a 15% downpayment. There are interest-only options, 30- and 40-year terms, and the credit-score requirements can be as low as 620.
From purchase to refinance, these loans provide outstanding options for a variety of borrowers.
Examples of How Bank Statement Loans Can be Strong Options for Different Borrowers
The bank statement loan program is a solution for many people, especially self-employed borrowers have unique income sources or who do not claim a large enough income to qualify under normal means.
Here are a few examples of borrowers who would be excellent candidates for these loans…
Jennifer, 45, Pediatrician
Jennifer shows us how business profits and revenues can provide stronger financing options than reported income.
Jennifer is a smart, well-educated, hard-working pediatrician who provides world-class medical care for infants, children, and adolescents. She is one of the most respected members of her community, well known for providing outstanding care to the area’s youth.
Jennifer owns 75% of her practice, and reports and annual owner draw of $100,000. She and her spouse, who is an employee with an $80,000 annual salary, meet a few complications when searching for a house. The practice revenue is $1.5 million, but the business sees revenues of $400,000.
With a typical loan based on reported income and tax documents, Jennifer’s borrowing power would be limited. By using bank statement loans, the potential for a higher loan, with more purchasing power, is increased.
Ben, 35, Independent Consultant
Ben shows us how qualifying with bank statements can be more effective than using tax returns.
Ben provides a perfect example of how different different reports of personal income can impact a person’s maximum borrowing power. As an independent consultant, Ben clearly does not have the same type of income as a typical employee. His salary is based on work performance, the market, and many other factors, and it can vary on a month to month basis.
Let’s look at two scenarios…
In the first scenario, we see that Ben reports $275,000 in personal income. With this income, we can assume that Ben will have a maximum monthly payment of $6,100 in our bank statement loan program.
But what happens if his reported personal income declines? What if we adjust his reported personal income to $150,000 with a personal tax obligation of $36,000? In this case, Ben still has a strong income and can qualify for an excellent loan, but his maximum monthly housing payment is reduced to $3,895.
In the second scenario, the lower owner draw lead to a lower effective tax rate. A bank statement loan, in this case, could get Ben approved for a better loan than a mortgage based on tax returns.
Micheal, 48, Self-Employed Accountant
Micheal’s example shows how personal accounts can be used to create a buyer-friendly mortgage.
Micheal is an accountant who serves clients in the local area, including businesses and individuals. Operating his own accounting office, Micheal has become one of the most respected individuals in his community, with a reputation for accuracy, quality, and reliability.
Micheal’s income is categorized in two ways. First, he has a 12-month average of $4,458.33 on his personal account. He has a $5,000 maximum monthly housing payment. In this case, a 1003 income comparison is performed, with $4,458.33 divide by $5,000, which equals 10.83%. In this situation, Micheal does not need to provide an LOX for the 1003 comparison, as the variance is right around 10% and not to large.
(This process, we admit, can be complex and confusing. For more information on how it works, contact our team today and we’ll explain everything in a clear, detailed manner.)
What Types of Borrowers are Ineligible?
“Bank account,” as you probably know, is a fairly broad term. There are many different accounts that could be called “bank accounts,” including checking and savings accounts. So what types of account can you use towards your bank statement loan? With our program, fortunately, you can use quite a lot.
If you decide that a bank statement loan would be the right choice for your purchase, you’ll have the option to use a variety of different accounts.
Accounts are generally divided into two types: personal accounts and business accounts. For personal accounts, you can use a 12-month average of gross acceptable deposits, as well as a 1003 income comparison. This gives you the chance to have an extremely flexible process when qualifying for a loan.
The other type of accounts you can use are business accounts. For these accounts, the qualification standards can be a bit more limited. With business accounts, you can only use up to two account, and only one account per business. So if you own two business, you can only use a single bank account from each business.
Also, no statements that reflect individuals who are not loan applicants are allowed when using the bank statements as qualifying income.
Get the Service You Need for a Bank Statement Loan!
If you are a self-employed professional, an investor, or a retiree, bank statement loans may be perfect for your next purchase. Contact our team today to learn more about these top-quality mortgages, and get the service you deserve from our world-class staff!