If you are searching for Bank Statement Loan Lenders, you must look for a reliable money lending company. Have you ever heard about bank statement mortgage loans? If not, you are scrolling on the right page. Read the blog below before applying for one.
What Is a Bank Statement Loan?
When it comes to a stated income loan, a bank statement loan is another name. In this, you won’t need to provide the lender with typical financing documents to apply for the loan. Just using your bank statement is enough to prove income, which ensures that your income is consistent. If you are a small business owner, doctor, lawyer, or even real estate agent, you can look for this kind of loan. It is even helpful for small property investors.
The Benefits of Taking a Bank Statement Loan:
Apart from the traditional funding options, this bank statement loan has its pros to buying a home. However, you can miss looking for certain drawbacks that would be mentioned later in the content. The potential advantages are the following;
1. Flexibility: People with non-traditional income streams can look for this bank statement loan. They can use bank statements to apply for a mortgage within qualified terms and policies.
2. Accessibility: There is no need for perfect credit to get a bank statement loan. Some money lenders accept borrowers that are as low as 620. It's good to evaluate the loan accessibility.
3. Higher Loan Limits: Compared to conventional loan limits, bank statement loans have higher loan limits. It's very obvious, but not always, that borrowers can enjoy the maximum benefit of high-value funds easily.
Who Can Take Advantage of a Bank Statement Loan?
Bank statement loans are an amazing option for anyone who earns money, and they are different from the traditional way of earning money. The non-traditional earning ways include the following;
1. Small business owners.
2. Independent contractors and agents.
3. Freelancers.
4. Gig workers.
5. Retirees.
Some Drawbacks You Must Know With Bank Statement Loan:
Unlike advantages, bank statement loans also have specific cons. Some of the noticeable drawbacks are as follows;
1. Higher Borrowing Costs: This may have an exceptionally higher interest rate as the loan nature is quick, risky, and non-traditional.
2. Larger Down Payment: Typically, in bank statement loans, lenders need a down payment of at least 10 per cent. This is, of course, higher than those required in conventional loans and government-backed mortgage options.
3. Prepayment Penalties: Often, some bank statement mortgages or loans come with prepayment penalties. This eventually makes refinancing costly.
The Other Ways or Alternatives To Bank Statement Loans:
Obviously, bank statement loans are quick, easy and good for non-traditional earning people, but there are other ways, too. Read some of the other mortgage loan options that are alternatives to bank statements in the next section;
1. Conventional Loans: These are very common and easy to find with every mortgage lender provider. In fact, they offer better interest rates and terms than bank statement loans.
2. FHA Loans: These are popular with first-time homebuyers. What makes them easy and most approachable is the flexibility to apply and qualification criteria.
3. VA Loans: Money borrowers who are service members, veterans or surviving spouses can apply for it. It's a fantastic mortgage with no money down and a lower interest rate.
4. Asset Depletion Loans: People with no income source but significant assets can have it. In this, the lender uses those assets to qualify a borrower for the required loan or mortgage. However, such a money lending option is costly and especially needed funds to apply for a home or property.
5. DSCR Loans: For real estate investors, a DSCR loan is best. DSCR, which stands for Debt Service Coverage Ratio, is based on the portfolio’s cash flow. Typically, lenders are conservative and account for higher expenses and vacancy rates.
6. Interest-only Loans: In this type of money lending, the borrower is only required to pay interest for the first few years of the loan term. However, later can pay both principal and interest, keeping costs low.
The Final Verdict:
If you are looking for bank statement loan lenders, then many find many companies. The struggle can be genuine, so look for reputable and experienced only. For small business owners, freelancers, and even gig workers, a bank statement, mortgage, or loan is best. It is even profitable money financing for full-time real estate investors. Just simple qualification terms are imperative as there are no documented ways to follow, which is evident in traditional loans.
