Chicago Bank Statement Mortgages: Self-Employed Borrower Solutions

Qualifying for Chicago bank statement mortgages is an option available only to people whose income is not from wages and for investment properties. These mortgages are a good option when the income on business taxes is not always a good reflection of how well a business (freelancer, contractor) is doing. Qualifying is done either with business bank statements or personal ones. If with personal, lenders accept 100% of the deposits (less refunds, transfers from other accounts you own, gifts and such) as income If with business, they accept as above and deduct business expenses.  Depending on lender, they will use profit and loss statements, accountant letter stating the percentage of gross income that goes to expenses, a multiplier based on what’s typical for the type of business they’re dealing with. If that is your situation and you want to buy or refinance a 1-4 unit property, you might consider bank statement mortgage loans.

Chicago Bank Statement Mortgage Requirements

1. typically, borrowers must have been earning non-wage income for 2 years
2. they must meet credit requirements (varies by lender; generally, credit score of 640 or higher, no recent bankruptcies, foreclosures, deeds-in-lieu, mortgage lates)
3. Low number of NSF’s (varies by lender); NFS means bounced checks, insufficient funds
4. 100% gift funds allowed (by some lenders)
5. business or personal bank statements
6. some lenders allow only one account
7. Maximum LTV’s vary based on what the economy as a whole is doing (80-90%) and type of loan (investment, second home, or owner-occupied)
8. Some lenders only do detaches single family homes, townhouses and condos. Speaking of condos, some allow non-warrantable condos.
9. Loan limits vary by lender, some stop at $2,000,000, some at $4,000,000.

You may have noticed a lot of qualifiers. That is because these are non-QM loans (Fannie Mae, Freddie Mac or a Government agencies don’t get involved). That means each lender creates a program based entirely on their wants and needs.

12-Month Bank Statements Mortgage Program

Most people seem to want a 12-month bank statement mortgage. If your past 12 months are better than the previous 12 months, it makes sense. Because lenders average all the months. But if the difference is not that high, it might not be a good idea. When you show you qualify based on 12 months, lenders perceive you as riskier than if you do it based on 24 months. That riskier perception translates into higher interest rates.

2 or 3-Month Bank Statement Loans

Every now and again, a lender will offer a program that requires only two or three statements to determine whether a borrower has enough income. The interest rates for these programs are higher than those for 12-month bank statement programs. Usually, these programs are offered when the market is doing great.  When interest rates are going up or inflation is too high or something else bad is in the news, they are not.  If you think you might benefit from such a program, contact me.

Home Loans With Bank Statements As Income

Qualifying for a Chicago home loan with bank statements is simple, but not as simple as people think. Lenders do add up your deposits. But your deposits are not all considered income. Lenders exclude certain deposits: refunds, transfers from another account you own, and unusual deposits. And it makes sense. They are looking to establish your typical and, therefore, likely-to-continue income from whatever activity you earn your money with. To get started with Chicago bank statement mortgages you need to provide your lender copies of bank statements, your photo ID, and fill out and sign an application.  That’s it.