Not only that but remote work and self-employment are on the rise, even though self-employment has been gaining popularity over the last few years. In the past, self-employed individuals have had a difficult time obtaining mortgages because they don’t have a regular income.
Luckily, self-employed borrowers no longer need to apply for conventional loans as there is a new program available just for these individuals that can help them get a home loan in Montana without the regular income documentation.
Mortgage lenders like Griffin Funding have evolved and can now be more inclusive with our loan offerings to include individuals like retirees and self-employed business owners. Learn more about our Montana bank statement loans.
What is a Montana Bank Statement Home Loan?
Self-employed individuals and retirees don’t have regular streams of income. They don’t get paid every two weeks or have taxes taken out of their paychecks. Instead, they pay their own taxes and get paid based on the terms they set with their clients. Business owners and retirees are similar in that they don’t have regular W2 income.
Lenders verify income for a conventional loan using paystubs, tax returns, and W2s. However, retirees and the self-employed don’t have this documentation, which typically means they are automatically denied when applying for a home loan, even though they make enough money and have good credit.
Bank statement loans are a solution to this issue. Now, instead of using pay stubs to verify income, underwriters can verify the incomes of borrowers through their bank statements.
If you’re self-employed or don’t have the traditional type of income necessary for a conventional loan, you may qualify for a bank statement loan program that allows borrowers to get approved for a loan by showing the last 12 or 24 months’ worth of bank statements.
Bank Statement Loans vs. Conventional Loans
The biggest difference between bank statement loans and conventional loans is the underwriting guideline for verifying income. Bank statement loans are an alternative solution for borrowers who need to verify their income in another way. These loans are just one type of non-qualified mortgage (Non-QM) loans that expand the loan criteria to allow for different types of income documentation that demonstrate the ability to repay the loan.
Who Can Benefit From a Bank Statement Loan?
Bank statement MT home loans in Montana are recommended for the following individuals:
- Business owners
- Freelancers, consultants & independent contractors
- Gig Workers (Uber and Grubhub drivers)
Typically, these individuals don’t qualify for a conventional loan because the income claimed on their taxes is not their true net income. This is due to factors like business deductions that might make someone’s income appear less than what it actually was. Bank statement loans provide an easy solution to this problem by allowing underwriters to use bank statements to verify income in the form of deposits into bank accounts.
Montana Bank Statement Loans from Griffin Funding
Griffin Funding is able to provide you with non-QM loan products that fit your unique financial and employment situations. We can help you if you live in the following areas:
- Four Corners
- East Helena
- And more
Benefits of Bank Statement Loans In Montana
Montana Bank Statement Loan Benefits
There are several unique benefits of bank statement loans in Montana, including:
- Income verification doesn’t rely on tax returns
- Income statements are shown by monthly deposits
- The lender can choose to look at 12 months or 24 months of bank statements
- Down payments as little as 10%
- You can borrow up to $5 million
- Higher debt-to-income (DTI) ratio of accepted
- Options for a fixed-rate mortgage or adjustable mortgage
Our Bank Statement Loan Solutions
We currently offer two home loan programs for self-employed and retired individuals:
- Personal Bank Statements: qualify on 12 or 24 months bank statements. We count 100% of deposits as income.
- Business Bank Statements: qualify on 12 or 24 months bank statements. We count 50% of the deposits as income.
You may also be able to qualify for one of our loans in Montana with as little as three month’s worth of bank statements. Speak with one of our loan officers to learn more.
Eligibility Criteria for Bank Statement Loans
Your bank statement home loan eligibility depends on a number of factors, including your lender and your employment history. Other criteria include:
- Must be self-employed for at least two years. Some lenders will allow you to be self-employed for one year.
- Must have at least 10% down. Typically, 20% down is optimal if you can afford it and can result in lower interest rates.
- Must have four months of PITI (principal, interest, taxes, and insurance) reserves in your bank account for home loan amounts under $1 million and six months PITI reserves for one-month bank statements. This means that you should be able to pay off at least four months of your mortgage loan at one time, even though you won’t be asked to.
- A credit score of at least 620. This varies by lender.
- Profit and Loss (PL) statements if you own a business.
Bank Statement Loan Application Process
Before you apply for a bank statement loan, make sure that you have access to 12 or 24 months of your bank statements. This will help you get an idea of whether you are likely to qualify for the loan before applying.
Once you find a lender, you will submit all required information for them to consider when qualifying you. Your financial information will be reviewed and verified after your application is submitted. You will then find out whether you qualify for a loan and can lock in your rate.
Frequently Asked Questions
Do you have to be self-employed to qualify for bank statement loans?
Unless you are a retiree or business owner, you must be self-employed to qualify for bank statements. If you have a co-borrower, at least one of you must be self-employed. Not only that, but you must be self-employed for at least two years.
Can I finance investment property?
Yes, you can use bank statement loans to finance investment properties or purchase second homes.
Can I use personal bank statements for a bank statement loan?
Yes, if you do not have business bank statements, you can use your personal bank statements to qualify.
Are there other types of home loans for self-employed borrowers in Montana?
If you’re self-employed, you’re more likely to get approved for a bank statement loan than any other loan, especially conventional loans. However, if you have a full-time job in addition to being self-employed, you might qualify for other loan options like a conventional loan.
Depending on your unique situation, you may always qualify for:
- Asset Based Loans: Asset-based loans are another type of non-QM loan that uses assets as collateral instead of income.
- FHA Loans for First-Time Homebuyers: First-time homebuyers qualify for a loan with as little as 3.5% down.
- USDA Loans: You may qualify for a USDA loan if you choose to purchase a home in a qualified rural area. These loans require no down payment.
Apply for a Bank Statement Loan in Montana
Whether you’re self-employed or a retiree, we can help you find the best mortgage solution for your unique needs. Our loan officers are knowledgeable and enthusiastic about helping you secure a mortgage quickly and with as little stress as possible.
Ready to apply for a Montana bank statement loan? Begin the application online today.