How Lenders Determine Bank Statement Loan Rates
1. Credit Scores – The better your credit score is, the lower your interest rate will be. So, if your score is on the lower end (think 680 or under), then you might work on improving it before applying for a bank statement loan.
2. Down Payment – your credit score will impact what down payment you’ll need, as well as your interest rate. Generally, the lower your score is, the more you’ll need to put down.
3. Loan-to-value ratio – The LTV of your mortgage – will also impact what rate you get on your bank statement loan. To calculate your LTV, you take your loan amount (how much you borrow for the house) and divide it by the home’s value. So, if your loan is $500,000 and the home is worth $625,000, your LTV is 80% (500,000/625,000). Lower LTV’s will typically qualify for the lowest rates.