Bank statement loans = YES

Minneapolis, MN:  Not every potential home owner fits the cookie cutter guidelines for most traditional loans, like standard 30-yr fixed rate loans backed by Fannie Mae or Freddie Mac, or standard government backed loans like FHA Loans, VA Loan, or USDA loans.

The mortgage industry had plenty of alternative options back in the day, including bank statement loans, stated income, no proof of income loans, asset based program, and more, right up until the housing crash in 2007.

Government mandated changes after the housing crash left many home buyers needing these alternative loan programs with no loan options whatsoever.  Slowly, the non-conforming loan industry is making a comeback, albeit looking much different than years ago.

Stated income loans existing, but are super restrictive. No doc, or no proof whatsoever of income loans do not exist. The most popular alternative documentation loan option that HAS returned is using your bank statements as qualifying income.

Bank statement loans

These bank statement loans come in many varieties, but generally consist of the following basic requirements:

  1. Must be self employed
  2. Use 100% of personal bank statement deposits as income
  3. Use 50% of business bank statement deposits as income
  4. Higher credit scores
  5. Loans of 80% loan-to-value or less
  6. Interest rates 1% to 2% higher than standard loans.

There is no one set of rules, like you find with standards loans that all lenders use for things like FHA, VA, Fannie Mae, Freddie Mac, etc. Because of this, you will find all sorts of variations between lenders offering bank statement loan programs.

But the good news is that at least there are some options again for those home owners who don’t fit the traditional loan model.

We offer bank statement loans for properties located in Minnesota, Wisconsin, and South Dakota. Click here to apply online or feel free to contact us at (651) 552-3681.

Click to apply online

Equal Housing Lender. NMLS 274132. Not everyone will qualify. Not an offer to enter into an interest rate lock agreement. iMortgageJoe.com


Are No Doc loans still available?

“NO DOC” loans had been around for years, and served a niche market for the self-employed, commission, and tipped income home owners. Because of their additional risk, they came with higher interest rates, bigger down payments, and generally were only available to self-employed people with a minimum of 2-years provable self-employment history and trouble documenting their true income.

As the home loan markets changed through the early 2000’s, these loans grew in popularity, especially once Wall Street introduced new no doc, stated income, stated assets, no job, and other ridiculous variations with underwriting guidelines so silly almost anyone could qualify for a home loan.

These new variations turned a small niche program into what became commonly known as liar loans. This was because because both customers and Loan Officers were easily allowed to misrepresent the borrowers true circumstances.  They were highly abused by consumers, and bad loan officers everywhere, as people realized they could easily get a loan they either should not be getting at all, or more commonly, to get a bigger loan than they normally would have received.

These liar loans were one of the first casualties of the mortgage market meltdown as many of these customers were some of the very first people to end up in foreclosure. Lenders everywhere quickly pulled them from their product lines, and many states now have laws on the books banning them completely.

Unfortunately, the self-employed, commissions, and tipped income people who truly need and benefited from stated income, no documentation (NINA, NIVA, NISA, SISA) type loans are now without loan options. The old saying, one bad apple spoils the whole bunch… In this case, it was a whole bunch of bad apples that spoiled it for the one who really needs it.

If you are looking for a respectable No Documentation loan, you are pretty much out of luck, unless you are:

  1. In a state that still allows them
  2. Have excellent credit
  3. Are in need of under 65% loan-to-value
  4. Are willing to pay huge up-front costs and very high interest rates to “hard money lenders

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Looking for a “no doc” loan in MN and WI?, Can you still get financing? Maybe, but not without fully documenting your ability to repay your loan.

But, don’t give up just yet. Let a licensed professional loan officer review a full application.