Self-mortgage or bank statement loans offer you the chance to secure a home loan without having a traditional job. This means the seasonal workers or freelancers do not have adequate documents to verify the income due to the nature of their jobs. The other side of the coin indicates that a person with a regular job needs to submit the tax-returns and W-2s for proving the income. Also known as the alternative documentation loans, many entrepreneurs or single employers without consistent income can fulfill their dreams through this option.
Only a few lenders ensure bank statement home loans in Houston assessing the applicants’ credit scores and other factors affecting the interest rate. The loan has low credit score requirements and people with 550 credit scores can easily apply. Nevertheless, potential borrowers should be aware of other things. Let’s have a look at the important information stated below.
Know about Loan Program Highlights
As the name suggests, the first thing is to gather one year of consecutive personal or business bank statements. You have to be self-employed for two years with a license issued by DBA, corporation, or other registered documents. The borrower must be a citizen or a VISA-holder for non-permanent US residents. After passing these requirements, you can buy or refinance the mortgage for a single-family second home. You can utilize the mortgage for approved condos and townhouses. Co-signers can offer help to the qualified single-family residences and the self-contributions are permissible based on the down payment and occupancy. Moreover, you apply for loans ranging between $200,000 and $5,00,000. Based on the case, the lender can allow for a smaller loan amount. Besides these, the most important thing about the loan program is no private mortgage insurance with 10% down payment. Not only can you purchase investment properties or second homes but you can also get greater loan limits.
Benefits at a Glance
The bank statement loans show the borrowers who have inconsistent income a ray of hope to build their dream abodes. If you are a freelancer, lawyer, consultant, or real estate agent, you can purchase an FHA loan or a conventional loan. The tax returns do not seal the deal because the deductions and business write-offs never reflect the actual amount you are earning. On the other hand, the bank statements show whether you qualify for the mortgage or not. The present homeowners can further use the bank statement loans for refinancing home loans. After quitting the traditional workforce, the borrowers can utilize the benefits related to refinancing.
However, the borrowers should be aware of the high-interest rates and large down payment options. The lender will assess every possible way whether you have the capacity to pay back the loan instead of going on default. Remember, every lender is not capable of offering the mortgage to special borrowers, and you essentially need to find one with experience in this field. So, find an experienced lender who has a history of confirming bank statement loans to seasonal workers or freelancers before!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.