By Bill Lyons | Updated on February 3, 2024
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    Bank statement loans for first-time buyers are a way to secure a mortgage using non-traditional means. When you have self-employed income that you are depositing into a bank account, you can obtain a mortgage through a bank statement loan. 

    A bank statement loan can make it easier for business owners, contractors, and freelancers to provide proof of income when applying for a mortgage. So, if you are looking to buy a home for the first time and you don’t have a typical job that provides pay stubs, consider applying for a bank statement loan through Griffin Funding. 

    Below, we go into more detail about what bank statement loans are, how they work, and how you can qualify. Read on to learn more about what a bank statement loan is or navigate the article using the links below. 

    What Is a Bank Statement Loan?

    Bank statements loans are an excellent option for individuals who are self-employed and don’t have traditional pay stubs for the lender to consider. You will need to have bank statements for at least 12 months that provide proof of regular deposits in order to qualify for a bank statement mortgage. This allows you to seek a mortgage without having to show the net income listed on your taxes and makes it possible for you to qualify for a mortgage without pay stubs.

    How Does a Bank Statement Mortgage Work?

    Bank statement loans make it possible to qualify for a non-traditional mortgage using your bank statements instead of pay stubs or tax returns. In order to get approved for a bank statement loan, you will have to fill out an application that includes at least 12 months of bank statements. Your bank statements, along with your credit score and debt-to-income ratio, will be considered during the application process. 

    Once you are approved, a bank statement mortgage will function like a traditional home loan. Your loan will be funded, allowing you to purchase your home, and then you will begin repayment through monthly mortgage payments. With these Non-QM loans, the criteria for qualification is more flexible when compared to traditional loans. 

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    Benefits of Bank Statement Loans for First-Time Home Buyers

    There are a number of benefits to choosing bank statement loans for first-time home buyers, especially when you are a self-employed individual or couple without pay stubs. When you are looking to purchase a home for the first time, but you can’t provide proof of income through pay stubs or tax returns, bank statement loans for first-time home buyers are the way to go.

    Bank statement home loans offer the lender flexibility in the terms of the loan, making it possible for potential home buyers to secure a mortgage they may not qualify for using traditional lending criteria. The benefits of bank statement loans to purchase a home or property include:

    • Regular monthly deposits are reviewed and considered your verified income.
    • You can show 12 or 24 months of bank statements to qualify for a bank statement loan.
    • There’s no need to show your income tax returns in order to secure a mortgage.
    • It is possible to secure a bank statement home loan with as little as 10% down.
    • You can qualify with a debt-to-income ratio as high as 55%.
    • Bank statement home loans offer you the ability to borrow up to $5 million if you qualify.
    • You can choose to secure an adjustable-rate or fixed-rate mortgage through the bank statement loan process.

    The bank statement loan process is one where you are able to have more flexibility than with a traditional mortgage. You will still want to have a credit score above 660 so that you can secure a low interest rate and favorable loan terms. It is important to get your credit score as high as you can in order to qualify for the best home loan for your specific needs. Whether you are applying for FHA loans, asset-based loans, or a bank statement mortgage, you can get the most affordable loan with a low interest rate. 

    Bank Statement Loan Qualification Requirements

    There are a number of key requirements you must meet in order to secure a bank statement mortgage with Griffin Funding. This type of non-traditional mortgage offers you more flexibility when it comes to the parameters for securing a loan to purchase a new home. The key requirements you must meet in order to qualify for a bank statement loans include:

    • You must be self-employed or a business owner for a period of at least two years to secure a bank statement mortgage loan.
    • Your credit score has to be 660 or higher for a bank statement mortgage loan to be approved.
    • The lowest amount you can borrow for a bank statement mortgage loan is $100,000, while the highest amount possible is $5 million.
    • As a guarantee for the mortgage, you must have four months of PITI in the bank if the loan is less than $1 million, and six months of PITI if the loan is higher than $1 million.
    • You must be able put down at least 10% of the property’s purchase price.

    Take a look at the criteria for securing a bank statement loan, and make sure you meet the qualifications before you apply. If you’re not sure whether you meet all of the requirements to qualify for a bank statement home loan, reach out and we can help you determine your eligibility. 

    How to Apply for a Bank Statement Loan as a First-Time Home Buyer

    In order to secure a bank statement loan as a first-time home buyer with Griffin Funding, we have established a straightforward process for you to follow:

    1. Schedule a discovery meeting, where you have an in-person, virtual, or phone discussion to talk about what your mortgage goals are, what you have for a down payment, your credit score, and your monthly income.
    2. Fill out our online application. You can fill out the application during or after your initial discovery meeting if you want to work with Griffin Funding to secure a mortgage.
    3. Authorize our loan specialist to lock in the interest rate you have been quoted as part of your potential mortgage.
    4. We will send an initial loan application either digitally or via overnight mail, depending on your preference, and you will be able to review and sign it. 
    5. Get a checklist of all the documentation you will need to give our mortgage lender in order for your mortgage to be approved.
    6. Your mortgage paperwork will be submitted to our underwriting department and processed for approval.
    7. The property goes through the appraisal process in order to establish the condition of the property and assess the value to determine the mortgage needed.
    8. Once your mortgage has undergone an underwriting and appraisal process, we will notify you if anything else must be completed before the final document signing. 
    9. Sign all of your loan documentation in the presence of a notary.
    10. Your loan will be funded and recorded.

    Reach Out to Learn More About Bank Statement Home Loans

    Bank statement loans for first-time home buyers are an excellent option when you are self-employed and can show income via your bank statements. When you don’t have a traditional paycheck, you can secure a mortgage if you are able to show income using bank statements. And, with a high credit score and low debt-to-income ratio, you can secure the best rate and terms for your loan. 

    If you are ready to learn about your mortgage options with Griffin Funding, it’s time to reach out to get a quote and see what you qualify for. With our professional mortgage lenders at Griffin Funding, you will get the care you need to find the right mortgage for you. With our bank statement loans for first-time home buyers, you will find out what you can qualify for when you talk to us about your choices. Find your dream home, and secure the mortgage you need to make your purchase.

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    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 22 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 10 years in business.