Minneapolis, MN: Not every potential home owner fits the cookie cutter guidelines for most traditional loans. The mortgage industry had plenty of alternative options, including bank statement loans, stated income, no proof of income and more, right up until the housing crash in 2007.
Government mandated changes left many homeowners with no loan options. Slowly, the non-conforming loan industry is making a comeback, albeit looking much different than years ago.
Stated income loans, and no proof of income loans do not exist, but a popular option that HAS returned is using your bank statements as qualifying income.
These loans come in many varieties, but generally consist of the following basic requirements:
- Must be self employed
- Use 100% of personal bank statement deposits as income
- Use 50% of business bank statement deposits as income
- Higher credit scores
- Loans of 80% loan-to-value or less
- 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 slight variations between lenders.
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.
Equal Housing Lender. NMLS 274132. Not everyone will qualify. Not an offer to enter into an interest rate lock agreement.