Bank Statement Questions?

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How do you calculate income using my business and/or personal bank statements?

While you can use either personal or business bank statements to provide income verification, some banks may require both if applicable. Self-employed borrowers can provide 12 or 24 months worth of bank statements but 24 months is preferred for better interest rates and terms. If you deposit earnings directly into a personal bank account then the mortgage lender will typically use 50-60% of the deposits to determine your gross income. If you transfer money from a separate business account into a personal one, the lender will use all of the funds to calculate your gross income. From there, they will divide the annual income by 12 to determine the mortgage payment amount you can pay each month. Many lenders will use the 28/36 rule when determining your mortgage payments. This means that your mortgage payment should be no greater than 28% of your income and your total debt payments, any debt in addition to your mortgage payments, should be no greater than 36% of your income.

How do you calculate income using my business and/or personal bank statements?

While you can use either personal or business bank statements to provide income verification, some banks may require both if applicable. Self-employed borrowers can provide 12 or 24 months worth of bank statements but 24 months is preferred for better interest rates and terms. If you deposit earnings directly into a personal bank account then the mortgage lender will typically use 50-60% of the deposits to determine your gross income. If you transfer money from a separate business account into a personal one, the lender will use all of the funds to calculate your gross income. From there, they will divide the annual income by 12 to determine the mortgage payment amount you can pay each month. Many lenders will use the 28/36 rule when determining your mortgage payments. This means that your mortgage payment should be no greater than 28% of your income and your total debt payments, any debt in addition to your mortgage payments, should be no greater than 36% of your income.

 Can I qualify with a bankruptcy or other credit events like a foreclosure or short sale within the past 4 years?

You could essentially get a bank statement loan which is a type of non qm mortgage immediately after a bankruptcy or a foreclosure. However, you would still need to provide a credit score of 670 or higher and be ready to pay a higher down payment and interest rate than a conventional loan.

 Can I qualify with a bankruptcy or other credit events like a foreclosure or short sale within the past 4 years?

You could essentially get a bank statement loan which is a type of non qm mortgage immediately after a bankruptcy or a foreclosure. However, you would still need to provide a credit score of 670 or higher and be ready to pay a higher down payment and interest rate than a conventional loan.

Can I get a Bank Statement Loan if I have bad credit?

If No, what can I do to make my credit better. We will intro ILD phone number and contact form

You cannot get a bank statement loan if you have a credit score lower than 660. To raise your credit score, you can apply many tasks. For starters, you could check your credit history and see where you can improve: making sure you pay your credit cards on time and keeping low balances on your credit card. Keeping your credit utilization at at most 30% is also a great way to raise your credit score. Credit utilization refers to the portion of credit that you’re using at any time. The best way to ensure low credit utilization is to pay off your credit debt in full each month or at least 70%. Try whittling down your credit utilization down from 30 to 20 to 10%. You should also limit getting new lines of credit aka hard inquiries. Unlike hard inquiries which if done numerous times in a short period of time could have a very negative effect on your credit score since banks will see it as you need money, soft inquiries are self-checks of your credit or checks done by financial institutions. These will not affect your credit score. If you have a lot of debt, it could also be a smart idea to obtain a debt consolidation loan to pay all of them off. That way you’ll only have one loan to pay off quickly if you’re able to get a lower interest rate on the loan. For more information on how to increase your credit score, contact Internet Loans Direct at …

 How much down payment do I need for a bank statement loan?

Bank statement loans programs typically require higher down payments than conventional or qualified mortgage loans. This is because the risk the lender is taking on you is higher since you cannot provide 100% accurate proof of income through documents like tax returns and paycheck stubs. The exact down payment you will pay depends on your credit score.

 What are the factors that go into your interest rate?

Lenders calculate interest rates by taking into account many factors. One factor is the type of loan- a non qm loan will have a higher interest rate since it is not backed by the federal government. Another factor is your credit score- if you have a lower credit score you will be paying a higher interest rate. Another factor is how risky the type of loan is-for bank statement loans, the risk is higher because the lender cannot 100% confirm your income so they are not sure of your repayment ability. Another factor is the loan amount- a higher loan amount is riskier and therefore, has a higher interest rate. Your down payment is another factor- the higher your down payment is, the lower the interest rate since you’re considered lower risk due to the fact that you have more stake in the property. The last factor is the type of interest rate- if you have an adjustable interest rate instead of a fixed interest rate, the initial interest rate is lower because your interest rate could increase in the future if the market changes.

 How much down payment do I need for a bank statement loan?

Bank statement loans programs typically require higher down payments than conventional or qualified mortgage loans. This is because the risk the lender is taking on you is higher since you cannot provide 100% accurate proof of income through documents like tax returns and paycheck stubs. The exact down payment you will pay depends on your credit score.

 What are the factors that go into your interest rate?

Lenders calculate interest rates by taking into account many factors. One factor is the type of loan- a non qm loan will have a higher interest rate since it is not backed by the federal government. Another factor is your credit score- if you have a lower credit score you will be paying a higher interest rate. Another factor is how risky the type of loan is-for bank statement loans, the risk is higher because the lender cannot 100% confirm your income so they are not sure of your repayment ability. Another factor is the loan amount- a higher loan amount is riskier and therefore, has a higher interest rate. Your down payment is another factor- the higher your down payment is, the lower the interest rate since you’re considered lower risk due to the fact that you have more stake in the property. The last factor is the type of interest rate- if you have an adjustable interest rate instead of a fixed interest rate, the initial interest rate is lower because your interest rate could increase in the future if the market changes.

 Can I get a jumbo bank statement loan?

You can get a jumbo bank statement loan and the requirements are very similar to regular bank statement loans. You still need your personal and/or business bank statements; however, you will need a higher credit score of about 700-740 since the loan amount is higher and therefore the risk the lender is taking on you as a business owner is higher. The interest is also higher by .5% -1.5% for the same reason. They may also require a higher down payment of 25-35% down payment since the loan amount is higher than a conventional loan.

What documents do you need for a bank statement loan?

While you do not need any tax returns or paycheck stubs, you do need other documents in addition to the bank statements. You need proof of liquid assets like 401ks or investments to ensure you can pay at least 6 months worth of mortgage payments. You need your business license and a letter from your accountant proving your business expenses and that you pay taxes as an independent contractor.