What Is a Bank Statement Loan?
Bank statement loans for the self-employed in Ohio help entrepreneurs, business owners, freelancers, and retirees secure a home loan using their bank statements instead of income. A bank statement loan in Ohio allows you to use 12-or 24-month bank statements to verify deposits and prove your ability to repay based on the growth or balances of your accounts.
There are two types of bank statements you can use to qualify for a home loan:
- Personal Bank Statements: With personal bank statements, you can qualify with 12 or 24 months of bank statements, and we count 100% of your deposits as income.
- Business Bank Statements: With business bank statements, you can qualify with 12 or 24 months of bank statements, and we count 50% of the deposits as income. A 50% expense ratio is typical but we do have different expense ratios depending on business type. For example, a sole proprietor with no employees may only have an expense ratio of 20%, and therefore we can count 80% of their business bank statement deposits.
These loans are ideal for anyone from retirees to self-employed individuals like freelancers because we can use your personal bank statements to determine eligibility; you do not need a business bank account.
How Do Bank Statement Loans Work in Ohio?
These loans are often referred to as self-employed bank statement loans in Ohio because they cater to individuals who have complications when using tax returns to determine loan eligibility. Self-employed individuals, business owners, gig workers, and many other types of workers take their expenses as deductions on their tax returns, effectively reducing their taxable income. This offers tax benefits, but it makes securing a traditional mortgage difficult because it lowers their gross incomes.
For all home loans, lenders must determine your ability to repay, which is done with income verification. However, Non-QM lending does not require borrowers to have traditional forms of income. Instead, lenders use your bank statements deposits to verify your income and ability to repay the loan. Our loan officers manually review your bank statements and verify all information.
When reviewing your bank statements, we look for the following:
- Positive balances
- Little overdrafts
- Regular deposits
- Enough money for the down payment
- Several month's worth of mortgage payments and closing costs
Ohio bank statement loans are a solution to this issue, offering the option to prove a borrower’s ability to repay based on alternative methods.
Benefits of a Bank Statement Loan
Bank statement loans offer several advantages over traditional loans. Since they are designed for people without W2 jobs and allow borrowers to use bank statements as proof they can repay the loan, they are ideal for the self-employed, retired, or anyone else who may take significant deductions on their taxes.
Benefits of bank statement loans in Ohio include:
- Down payments as low as 10%
- No tax returns or pay stubs required
- Higher debt-to-income (DTI) ratios allowed
- Adjustable and fixed-rate mortgage options are available
- Up to $5 million loan amounts
- Interest-only option available
How to Apply for a Bank Statement Loan in Ohio
Applying for a bank statement loan in Ohio is easy with Griffin Funding’s online application. Our application will ask you to upload at least 12 months of bank statements, but you may also choose to upload 24 months of bank statements, depending on your needs.
We use a manual underwriting process to determine eligibility and loan amounts, and the process can take up to 30 days or more, depending on the complexity of the case.
What Do You Need to Get a Bank Statement Loan in Ohio?
Ohio bank statement loans have less stringent requirements than traditional home loans, making them a great option for individuals who use deductions to reduce their tax liability and do not want to use tax returns as proof of income. Instead, you will use your bank statements as proof of income to help us determine your ability to repay and the amount you can borrow.
To qualify for a bank statement loan, you will need to have proof of the following:
- Self-employment for a duration of at least two years or one year if you are working in the same field
- Down payment of at least 10% (depending on credit score)
- Credit score of at least 620
If you have a co-borrower who is a W2 employee, you can use a hybrid mortgage program using tax return income and bank statements from the co-borrowers. Non-QM loans, such as bank statement loans, allow you to combine multiple sources of income to qualify for a home loan.
If you do not qualify for a bank statement loan, Griffin Funding offers many other types of non-QM loans that may be a good option for you based on your financial and employment situation. A few other types of loans we offer include:
- Asset-Based Loans: These loans allow you to qualify for a mortgage with assets ranging from bank accounts to investment accounts like stocks and bonds.
- Jumbo Loans: Jumbo loans allow you to put down as little as 10% and are ideal for first-time homeowners and high earners.
- Interest-only loans allow you to spend the first ten years saving money on the loan by paying only the interest.
- VA Loans: These loans are for service members, veterans, and surviving spouses. They allow 0% down and more flexible options.
- DSCR Loans: This type of loan is typically for investors who want to use cash flow to determine eligibility and ability to repay the loan instead of tax returns.
Areas We Serve
Griffin Funding provides Ohio bank statement loans throughout the entire state, including the following cities:
- Bowling Green
- Shaker Heights
Apply for a Bank Statement Loan in Ohio
Ohio bank statement loan programs can make securing a home loan easier for self-employed individuals, gig workers, retirees, investors, real estate agents, and entrepreneurs. Instead of verifying your income with traditional methods, we can use your bank accounts to help you qualify for a mortgage and determine your loan amount.
Griffin Funding offers exceptional service to help you understand your options based on your unique circumstances. Talk to a mortgage strategist today or fill out our online application.