Bank statement mortgages allow you to purchase a home without the use of traditional income documentation — things like W2s, tax returns, and employment verification forms. They’re commonly used by freelancers, real estate investors, consultants, and contractors, and they offer a convenient, hassle-free way to buy a home — particularly for buyers without traditional income.
In recent years, bank statement loans have exploded in popularity, largely thanks to the growing gig economy and an uptick in self-employment.
Are you a freelancer or self-employed pro? Just don’t have traditional income? A bank statement loan may be able to help you buy a home, too.
Bank statement loans, self-employed mortgages, and other forms of non-QM loans have picked up steam in recent years. With the economic changes brought on by the COVID-19 pandemic, there’s a chance we’ll see an even bigger uptick in these loans in the months to come.
Here’s why:
As of last year, about 16 million Americans were self-employed, and according to estimates, another 24 million plan to join them by 2021 . These workers don’t have the documents required to qualify for traditional mortgage financing, so bank statement loans are critical for those looking to buy a home.
Real estate investing is going strong. Take flipping, for example. According to ATTOM Data Solutions, home flipping activity is at an eight-year high . Though many investors purchase homes in cash, those that require financing typically can’t use traditional loans. With their nontraditional income and self-employed status, most investors just don’t have the documents required to qualify. Additionally, their tax returns might not reflect their full earnings due to write-offs and business deductions.
Bank statement loans offer the perfect alternative, allowing investors to qualify using recent bank statements, which more accurately reflect their earnings and financial health.
Mortgage interest rates have never been this low, and it’s causing an increased interest in real estate in general. For buyers who don’t have traditional sources of income, bank statement loans are often the only way to get their foot in the door and take advantage of those rates before it’s too late.
The pandemic has temporarily shuttered many businesses and left millions of workers laid off or furloughed. This has made it harder than ever for lenders to verify employment and get the appropriate income-related documentation. HR officers are closed, teams are working remotely, and companies just can’t provide the documents buyers need to qualify for a loan.
In these scenarios, bank statement mortgage loans — sometimes called “no income check mortgages” — can offer the perfect alternative and allow the transaction to move forward without delay.
If you’re considering buying a home but aren’t sure you’ll have the documents necessary for a traditional loan, then a bank statement mortgage could be for you. Get in touch today to learn more about these mortgages or to get prequalified.
If you think you're ready for a Jumbo Bank Statement Loan of your own, learn more about how to qualify by downloading our free eBook, The Ultimate Guide for Self-Employed Bank Statement Mortgages.
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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 Loans, Real Estate Investor Loans, and Bank Statement Loans.