Lower Bank Statement Mortgage Loan Rates Make an Easier Path to Homeownership for Self-Employed Buyers
For hopeful self-employed homebuyers, bank statement mortgage loans have been a savior. Where traditional mortgage products have failed for these entrepreneurial buyers, bank statement mortgage loans have come in to save the day, making the path to homeownership easier, faster and more effective. Now, thanks to a drop in bank statement mortgage loan rates, they’ve also made it more affordable than ever.
Why the Sudden Drop in Bank Statement Mortgage Loan Rates?
Interest rates on bank statement mortgage loans have typically been at least 1 to 2% higher than those on traditional mortgages. But in recent months, the gap has narrowed — especially on 30-year fixed-rate loans.
Why the sudden change? Well, that’s largely due to the financial savvy of self-employed borrowers like yourself.
Let's break it down.
According to credit ratings agency DBRS, non-QM loans (the category of non-traditional mortgages that bank statement loans fall under) are performing well. In 2018, less than 4 percent of all non-QM borrowers were 60 days or more behind on their mortgage. That’s significantly lower than the delinquencies on FHA loans (8.93 percent according to the Mortgage Bankers Association) and those on VA loans (4.37 percent).
So, what does this mean for you?
This low delinquency rate spells success for investors — and it means better rates and more availability of these loans for self-employed homebuyers. Put simply, it’s a win-win for all involved.
The Benefits of Bank Statement Mortgage Loans for Self-Employed Borrowers
Bank statement mortgage loans offer a simple path toward homeownership (or refinancing) for self-employed borrowers. Rather than requiring W2s, employment verification forms and tax returns, these mortgages ask only for bank statements — usually 12 months worth.
Because self-employed professionals typically maximize their tax write-offs, the income reflected on their annual returns doesn’t reflect their true homebuying power. By using personal or business bank statements instead, we can more accurately gauge a self-employed pro’s financial scenario and qualify them for a loan.
With 40 million self-employed workers across the country accounting for a whopping 30 percent of the U.S. workforce, bank statement mortgage loans aren’t just a blip on the radar. They’re the mortgage product of the future — and they’re here to stay.
How to Get a Bank Statement Mortgage Loan
Not every lender offers bank statement loans, and among those that do, eligibility requirements can vary greatly. Make sure you seek out a mortgage professional who’s well-versed in these unique loan products, and talk to them about your financial situation, homebuying goals and preferences in advance of your purchase. An experienced pro will use this data to point you toward the best-fitting bank statement program for your needs.
Ready to Get Started?
If you’re a self-employed homeowner looking to leverage your home equity, lower your rate or access more cash, a bank statement refinance can help. Download our ebook, Ultimate Guide for Self-Employed Bank Statement Mortgages, or contact us to learn more about these no income verification mortgage loans today.
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About HomeLife Mortgage
For more than 25 years, HomeLife Mortgage has built a strong reputation in California and Florida as a leading mortgage broker, servicing the needs of borrowers who have been unable to obtain conventional financing. HomeLife Mortgage is at the forefront of non-bank lending offering the next generation of mortgages including Jumbo Non-Prime Loans, Real Estate Investor Loans, Bank Statement Loans, FHA Loans and VA Loans.