Virginia Bank Statement Loans – Self-employed Loans
Applying for a mortgage loan is not usually an easy process. The loan process can be even more challenging to be approved when you are a self-employed in Virginia. A solution to make the process easier is the Bank Statement Loan program which requires a self-employed borrower.
According to the SBA, there are approximately 725,000 people operate a small business in Virginia. Previously applying for a mortgage in 2010 as a business owner was very difficult. The good news is you can take advantage of all the tax deductions available for self-employed people and still qualify for a mortgage loan.
Virginia Bank Statement Loans – Bank Statement Lenders
You’ll just have to provide alternative financial documents to prove income instead of two years of tax returns. The alternative documents are your monthly bank statements. This will prove that you’re self-employed job has verifiable and sufficient deposits going into your bank account. This will be considered your income for loan qualifying purposes.
Your deposits must be high enough to pay your monthly mortgage payment according to the bank statement lenders guidelines. This method of underwriting a borrower is non-traditional but much better than a stated income loan.
The bank statement home loan is ideal because while many self-employed borrowers earn a good income, their tax returns display a much lower income. Our company and loan originators are experienced with these type of loans for borrowers who are business owner, or independent contractors.
An expert tax accountant is really good at saving self-employed workers thousands in tax dollars due to their familiarity about which items you can claim as business expenses on your tax returns. If you are a sole proprietor, you will typically file a personal 1040 and Schedule C. This IRS form is actually very similar to a Profit & Loss statement. A large majority of self-employed people have their tax professional deduct every business expense they can as long as it is legit.
Virginia Bank Statement Loan Programs
The most popular options you have are to provide your loan originator with copies of the most recent 12 or 24 months of bank statements. They can be either personal and/or business accounts. The lender will review your deposits to make sure the income meets their debt to income ratio threshold, which is typically 50.
If you provide business bank statements many lenders require 24 months to review your deposits. Some loan programs require a profit and loss or business expense letter.
How Do You Qualify for a Virginia Bank Statement Mortgage?
The borrower must be self employed, which includes 1099 independent contractors, and gig economy workers. A W2 salaried Co-borrower is acceptable if necessary and will have their income verified the traditional way. There is a minimum credit score of 600. Borrowers who want 90% financing, or 90 LTV, must have a 700 credit score or higher.
