As a real estate agent, you know the struggle your self-employed buyers face first-hand. They want to buy a home, they have the cash to cover a mortgage payment, but in the traditional lending world, they just don’t have much of a chance. But did you know that Realtors can use self-employed bank statement loans for clients to help them overcome these obstacles?
Here's how it works.
First, consider the problem: Most lenders prefer W-2 borrowers — meaning those with a steady, 9-5 job that can verify their employment and prove a consistent amount of income week after week, month after month. But that’s just not how the world works anymore. In fact, according to the Pew Research Center, three-in-ten U.S. jobs are held by the self-employed and the workers they hire. That calls for a change in mortgage lending, too.
Enter bank statement loans. Bank statement loans essentially allow borrowers to prove their income and cash flow by showing their recent bank statements — usually 12 to 24 months’ worth. This helps self-employed borrowers in two ways:
- It means write-offs and deductions meant to reduce your “taxable income” on your end-of-year returns won’t hurt your ability to buy a house. That taxable income can still say $20,000, but if you show you actually make $100,000 in your bank statements, you’re golden.
- It also makes W-2s unnecessary. You’re able to show the lender that you’ve covered your bills, monthly expenses and rent (which is likely higher than your new mortgage payment will be anyway!) without problem for a year or maybe more. You can prove you have the income to responsibly purchase a home and cover your mortgage.
Bank statement loans also make it easier for the self-employed to refinance. In today’s gig economy, it’s not uncommon for people to change jobs or go freelance after a while in the business. But if they own a home? That can make it difficult to refinance when the time calls for it.
Historically, this has put self-employed homeowners at a disadvantage. They can’t turn their home equity into cash (for repairs, renovations or even their kid’s college tuition), and they can’t refinance at a lower interest rate or to shorten their loan term. Now, with bank statement home loans, they can.
An Answer for Realtors, Too
It’s not just your clients who can benefit from self-employed home loans. You, as an independent agent or broker, could likely leverage these mortgages as well. Whether you’re looking to refinance your existing loan, buy an investment property, trade-up home or even help your recent college grad purchase their own property, a bank statement mortgage can make it easier (and potentially more affordable) in the long run.
Ready to Get Started?
To learn more about mortgages for self-employed people like yourself, your clients and nearly a third of all Americans, then download our free ebook, The Ultimate Guide for Self-Employed Bank Statement Mortgages, or contact HomeLife Mortgage for more personalized advice.
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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.