BANK STATEMENT (NON-QM)

NON QM bank statement loans are tailored for borrowers who might not have conventional W2 employment, such as the self-employed, business owners, and retirees. These are non-qualified mortgages, which means they don’t adhere to the Consumer Financial Protection Bureau’s underwriting criteria for qualified mortgages. Despite this, they offer a practical pathway to home financing, allowing borrowers to leverage bank statements to prove their income and financial steadiness, bypassing the need for tax returns.

Qualification Criteria:

  • To be eligible for a bank statement loan, applicants need to furnish bank statements, usually spanning 12 to 24 months, to demonstrate their capacity for loan repayment. This feature is especially advantageous for individuals whose tax returns don’t accurately represent their income due to deductions and business expenses.
  • Lower credit scores may also be acceptable, with certain lenders considering scores starting at 599.

Program Features:

  • Loan amounts under these programs can be substantial, reaching up to $6 million, covering various property types and values.
  • DTI ratios can be more accommodating than traditional loans, with some programs permitting DTIs up to 50% or 55%.
  • LTV ratios offer versatility, with up to 90% LTV for purchases and rate-and-term refinances, and up to 80% LTV for cash-out refinances available in some programs. terms can vary with the borrower’s credit profile and other considerations.
  • The program can accommodate various property types, including single-family homes, townhouses, condos, and multi-unit properties.
  • Borrowers can choose from fixed-rate and adjustable-rate mortgage options, including periods of interest-only payments.

Considerations and Limitations:

It’s crucial for potential borrowers to recognize that these loans might come with higher interest rates than traditional mortgages. Applicants often need a minimum of two years of self-employment, although some lenders may accommodate those with at least one year, given they have prior experience in their field.

At Expansion Mortgage, we specialize in working with self-employed borrowers, offering bank statement loan programs tailored to their unique financial circumstances. We aim to provide solutions that align with the intricate nature of self-employed finances.