Being an entrepreneur means creating a living with the knowledge and expertise to calculate risks, and hopefully build a successful business. It’s no easy feat, and often comes with unique challenges when it comes to securing financing. For business owners and entrepreneurs looking for a home loan, these challenges often revolve around documenting consistent income. Unfortunately, not having regular, consistent and documentable monthly or yearly income can make it tough to qualify for traditional home loans. That’s why we’re pleased to offer mortgage solutions that can work for non-traditional home buyers.
Bank Statement Loans for Entrepreneurs
With traditional mortgage loans, borrowers typically need to provide documentation showing their monthly and/or yearly income meets certain lending standards. However, for entrepreneurs, this can be difficult. Business owners know that some months are better than others and income can fluctuate greatly. Lenders like Luxury Mortgage understand this, too. Fortunately, there is a loan alternative that can work for business owners without requiring them to provide proof of income.
The Bank Statement Qualifier Loan from Luxury Mortgage is a unique loan product that allows the borrower to use bank statements from deposit accounts to qualify for the mortgage. With the Bank Statement Loan, there is no need to provide the lender with W-2s, paystubs or tax returns. Instead, the borrower can provide documentation on their bank accounts for either their personal or business bank accounts.
Benefits of the Program
The Bank Statement Qualifier Loan offers several benefits, namely the ability for the borrower to use bank statements to qualify in place of traditional income documentation. Other benefits include the following:
- Low minimum credit score (as low as 580)
- Loan amounts available up to $6,000,000
- Borrow up to 80% of the home value
- Competitive interest rates
- Several types of properties are eligible, including 1-4 unit homes, PUDs, warrantable condos, and even non-warrantable condos on a case-by-case basis
In order to qualify for the Bank Statement Qualifier Loan, the borrower must meet certain eligibility criteria. Speak to a Luxury Mortgage lending professional for more information after reviewing the details below:
If you plan to use personal bank statements to qualify, you’ll need to provide your most recent 12-24 months of personal bank statements and the most recent three months of statements from your business account. You will also need to utilize 100% of deposits into personal accounts as income. The deposits from all accounts must be sourced, in other words the lender must be able to identify where the money came from.
If you plan to use business deposit accounts to qualify, you’ll need to provide the most recent 12-24 months of business account statements. A dollar amount will need to be calculated to represent income; in order to do this, multiply all eligible deposits by 50% and then again by the percentage of the borrower’s ownership in the business. (Eligible deposits are any deposits that can be sourced as business income.)
There are alternative methods to determining the dollar amount, including CPA-prepared profit and loss statements, CPA letters stating business expense ratio (which is used for calculation,) or subtracting withdrawals from deposits.
Other Qualifying Factors
Bank Statement Qualifier borrowers will need to meet the above requirements in addition to passing a credit history check and getting the property appraised. If the value of the loan is greater than $1.5 million, a second appraisal may be required.
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Four Landmark Sq. Suite 300
Stamford, CT 06901