Bank statement loans are not typical mortgages. A bank statement program is a home loan program that uses bank statements to calculate a borrower’s income. This is an alternative documentation loan type instead of using tax returns and W-2s in the qualification process. These loans are for self-employed borrowers who typically have substantial tax write-offs that make it challenging to demonstrate the necessary income to prove their ability to repay the loan. The bank statement loan programs use either personal or business bank statements to qualify borrowers.
Bank statement loans are different from conventional mortgages. The bank statement initiative utilizes the bank statement to estimate the income of the borrower.
This type of documentation is an alternative to utilizing W-2s and tax returns when checking for eligibility. This type of loan is meant for borrowers that are self-employed
that have significant tax write-offs that made it difficult to prove the required income and their ability to repay the loan. The bank statement loan initiative uses either a business or personal bank statement to make borrowers eligible.
Adjustable-rate mortgages (ARMs) are also known as variable-rate mortgages. The interest rate changes periodically depending on the corresponding financial index that's associated with the loan.
Debt service coverage mortgages can also be called cash flow mortgages.
This type of government-backed mortgage allows eligible active-duty service members, veterans and eligible surviving spouses to finance a home