Best Mortgage Option for Self Employed Buyers Uses Bank Deposits Instead Of Tax Returns

Published On: May 17, 2019|Categories: Blog, Buyers, Featured, Home Buyers, Jasper IN Real Estate, Mortgages|Tags: bank statement loans, debt-to-income ratio, self-employed|

If you are self-employed and have tried to get a mortgage, you know the challenges. As the owner of your own business, when your company does well, you actively try to put money back into the company. It’s an investment in your business, and a tax write off. It’s good business. You leave yourself less spending money for vacations and fun activities because you’re building your future. You dine out less than you easily could because when you have extra money, you purchase something extra for your company. $1200 extra this month? Why not pay for some extra advertising for the slow season. $5500 extra? Purchase a new point-of-sale. That’s how it goes when you’re self-employed, isn’t it? Forever, that meant you were out of luck when it came to a mortgage because when lenders were looking at your tax returns to judge your debt-to-income ratio and your extra spending money, it looked like things were incredibly tight for you. You and the banks both know that you could have done without the new point-of-sale machine. You already had one that worked good enough. You and the banks both know that your advertising was merely an investment that would bring you even more income next year. But the rules were the rules.

These days, there’s a new option and it’s incredibly exciting for people who own their own businesses. Now, homebuyers who are self-employed have the option to get a bank statement loan. This was introduced specifically for people who have faced challenges qualifying for a mortgage but can actually afford the payment. The self-employed.

With bank statement loans, the lenders will ask for bank statement deposits as your proof of income instead of your tax returns. Then, they will take a percentage of the average deposits into your business accounts and/or 100 percent of the deposits in your personal account and they will use that to determine if you can actually afford the mortgage payment.

So, if you tried to get a mortgage just a few years ago, but were denied because of your self-employment and good business practices, ask your lender about applying for a bank statement loan today. Get your pre-approval letter, and then call us this week so that we can get you into your Dubois County dream home!

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