The Best Way for the Self-Employed to Get a Mortgage: The Bank Statement Program
According to the Pew Research Center, the number of self-employed individuals in the United States increased 17.6% from the second quarter of 2020 to the second quarter of 2021.
While the number of self-employed individuals is increasing, there still lies a difficulty for them: getting a traditional home loan.
Let us provide you with an alternative: the bank statement mortgage loan.
Why is it so challenging for the self-employed to get a traditional loan?
Many mortgage lenders need to confirm your income before they'll approve you for a home loan. They usually verify this by looking at W2 tax forms.
That can be a problem if you work for yourself. Business owners, freelancers, contractors, and seasonal or gig workers often do not have the tax forms needed for a traditional mortgage.
In this case, self-employed individuals may be eligible for a bank statement mortgage.
What is a bank statement mortgage?
A bank statement mortgage provides alternate methods to confirm the income reported on a mortgage application. This specific program allows you to use documented bank deposits instead of tax documents.
- Using personal bank statements to qualify for a mortgage instead of W2s might be a good loan option if:
- You don’t have traditional tax documents to verify your total income or
- If you work for yourself or own a business.
How do I start the process for the bank statement program?
Now that you know the benefits of the bank statement program, the next question is: How do I start the process?
With Gulf Coast Bank & Trust, we offer mortgage loans for the self-employed! With our bank statement program, it offers:
- Primary, second, and investment homes (You can choose Single Family, PUD, 2-4 Units, Townhouses, and Condos)
- Loan amounts up to $3 million
- Fixed rate term loan options
For eligibility, you would need these options to qualify:
- 12 or 24-month business or personal bank statements demonstrating regular monthly deposits, or 1 or 2 years of 1099s
- A 2-year history of self-employment (a CPA letter and P&L sheets are acceptable as well)
Take The Next Step
Talking to a lender to start the bank statement program can help you with your goals, whether for a home.
Find a lender near you to discuss the Bank Statement Program!