Texas Bank Statement Loans
Texas home buyers are now able to find bank statement loans. Self employed individuals can qualify for a bank statement loan with 12 months of bank statements as proof of income without having to provide tax returns.
In the past, these loans were called stated income loans or even no documentation loans. Over time, the programs disappeared and then when they came back these loan programs developed into what we now call bank statement loans.
We will walk you through everything you need to know about Texas bank statement loans and then connect you with a Texas bank statement mortgage lender for a rate quote without pulling your credit.
How Do Bank Statement Loans Work in Texas?
When applying for a bank statement loan, your lender will look for you to be in business for up to two years minimum. No tax returns will be required and your lender will use the average monthly deposits in your bank statements to determine your gross monthly income. From there, that income will be evaluated with the other debt on your credit report to determine how much you can qualify for.
Texas Bank Statement Loan Programs
Borrowers will qualify based upon the 12-24 month bank deposits (both personal and/or business accounts). These bank statements are what the lenders will use to determine whether you have a steady flow of funds coming in to support your future mortgage payments. It is a great alternative for self employed people who cannot qualify based upon the net income on their tax returns and are looking for a self employed mortgage in Texas.
How Do You Qualify for a Texas Bank Statement Mortgage?
These are just general guidelines and may vary slightly based upon your personal scenario. So, we encourage you to click to connect with a Texas bank statement lender to have a free no obligation discussion.
- You must be self employed
- Down Payment – 10-20% down. Possibly more if you have a bankruptcy or bad credit.
- Credit Scores – Some lenders may allow scores as low as 550. We suggest speaking with one of our bank statement lenders to find out what your personal scenario is.
- Bank Statement Requirements – Most lenders require you to supply 12-24 months’ worth of bank statements. They will use your average monthly deposits and will use that as income.
- P&L Statements – It is possible that your lender may require you to provide a P&L statement.
- Assets – Your assets must be fully verified.
- Property Types – Single family, Second home and investment
*If you do not meet ALL of these requirements we recommend that you still contact us. Our lenders can often help if you have compensating factors.
Austin was having difficulty qualifying for a mortgage through a traditional lender because his tax returns showed a loss for the past two years. His accountant did a great job of writing off everything possible to save on federal income taxes.
He was turned down by a few lenders until one of the loan officers mentioned the bank statement loan program. Austin was able to finally speak with someone who offered the program. He provided 12 months of his personal bank statements and with a credit score of 680, he was able to qualify with 15% down.
Texas Bank Statement Loan Pros and Cons
- Helps self employed borrowers to qualify for a mortgage without using tax returns to prove income
- Can be done in some instances with only 10% down
- Bank statement mortgage rates are just slightly higher than conventional rates
- Up to 50% DTI – Debt to income depending upon your scenario and lender
- Typically no pre-payment penalties
- Available in all 50 states
- You need to be self employed for a minimum of 2 years
- If your credit score is extremely low, it may result in a higher down payment
- Rates are slightly higher than conventional but not much more
- Not all lenders offer this program
- Not available in government loans such as FHA, VA or USDA
12 Month Bank Statement Loan
There is a 12 month bank statement loan option offered by some lenders for the purchase or refinance of a primary residence. Some lenders may offer the 12 month bank statement program only for borrowers who are providing personal bank statements along with their application. If you are using a business account, the lender may require 24 months of statements.
Bank Statement Loans for Investment Properties
If you are interested in purchasing or refinancing an investment property, you can qualify using bank statements. The requirements are the same as if you were financing a primary residence. The only difference is your down payment will be at least 20% even with high credit scores.
You may want to consider a DSCR loan in this situation versus a bank statement loan. Compare the terms and prepayment penalties for each before you make your decision.
Frequently Asked Questions
Do I have to be self employed for a Texas Bank Statement Loan? At least one borrower on the loan must be self employed for a minimum of two years. You may also add a second borrower who is not self employed but that person would need to provide their W2s and tax returns.
Are self employed mortgages available? Bank statement loans are the primary mortgage program for people looking for a self employed mortgage.
Can I finance an investment property? Yes, you can get a bank statement loan for an investment or even a second home. The down payment requirement for an investment property could be a bit higher.
Can I use my personal bank statements in addition to my business statements? Yes, most lenders will allow you to use both personal and business bank statement accounts. However, you may only use a portion of the business accounts.
If I have a low credit score, can I still qualify? Yes, some lenders will allow for scores as low as 500 when applying for a self employed mortgage.
If I filed for bankruptcy, can I still qualify for a bank statement loan? Yes, some lenders will still help you with your loan but your down payment requirement may change depending upon how long ago the bankruptcy occurred.
If my business is losing money, can I qualify? You may still qualify based upon your bank deposits.
Why do bank statement lenders need to see bank statements? If you are not providing your tax returns, they need some other way to verify whether you will have the ability to repay the loan.
Can I refinance with a bank statement loan? Yes the qualifications are the same regardless as to whether you are making a purchase or trying to refinance.
Are there hard money bank statement loans? Hard money loans are something completely different than bank statement loans.
What are the bank statement loan interest rates? Interest rates for bank statement loans are very close to what you will find for a conventional loan.
Are there Bank Statement construction loans? We suggest that you complete the contact form and let us discuss your scenario with one of our lenders. Make sure you mention in the comments section of the form that you are looking for a construction loan. Our lenders often add more programs so we may be able to help you.
Who are some of the lenders that offer bank statement loans? Some of the bank statement mortgage lenders include North Star Funding, Citadel Servicing, First National Bank of America, Mortgage Depot, Angel Oak Mortgage Solutions, and others. However, we recommend that you click to follow this process to contact a lender and we will match you with the right one based upon your scenario.
Still have questions? Contact us!
We are able to help you to find a bank statement loan with the best bank statement lenders in the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming.