Bank statements only loan is a type of mortgage where lenders use your bank statements instead of traditional income documents like W-2s, pay stubs or tax returns to verify your income. This is often used by self-employed individuals or those with non-traditional income sources. Bank statements only loan typically requires 12 months of bank statements (either business or personal) to prove your income. They often come with a little bit higher interest rates compared to traditional loans, and the loan amount you can borrow depends on the average monthly deposits. Typically, with a CPA letter, mortgage lenders may allow you up to 70-80% of your average monthly deposits as qualifying income. This can vary by the lenders, but having a CPA letter generally helps increase the percentage they will consider. The lenders might use around 50% of your average monthly deposits as qualifying income if you do not have a CPA letter. This percentage can vary from lender to lender, so it is always best to check with our UFM team for specifics. In general, this loan type is great for those with irregular income streams or who have significant business expenses.
If you find this loan type interesting or a good fit with your financial situation and want to learn more details about this type of loan, please do not hesitate to contact our UFM team.