Lenders that Offer Bank Statement Loans

Essentially, Bank Statement Loans exist for the benefit of self employed persons who are unable to document their income and require assistance to qualify for a mortgage. In this case, a bank statement is used to verify income and qualify for a mortgage instead of tax returns.

In other words, a bank statement loan is a loan whereby self-employed borrowers qualify for a mortgage by using the average amount of deposits they put into their bank accounts. These deposits are presumed to be the income and tax returns is not necessary to qualify.

Back in the days, self employed borrower could easily get no doc loans or stated income loans. However, when the mortgage meltdown happened ten years ago, the programs to assist self employed individuals acquire loans were scrapped off. They were required to be eligible based on their net income that was indicated on the tax returns. This became difficult because a wide range of legal tax deductions needed to be taken into consideration.

Besides self employed individuals, bank statement loans are also great for people who do seasonal work, contractors and those who get commissions. For instance, some borrowers might have a solid business but you might not deduce how well the business is doing by just looking at the tax returns. They might have a substantial income on a monthly basis but due to varied business costs, he or she may be unable to meet the minimum income needed to qualify for a normal mortgage.