Bank Statement Loans
Hi, can someone provide information on bank statement loans- process, rate, cost.... just to have an idea... someone who has purchased with this type of financing.
The bank statement program is one of our Non-QM products. We add 12 months bank statements (can do 24 months as well, personal or business) together and divide by 12 to get the total monthly income. There is a calculation of taking expenses into consideration. We would review the bank statements and calculate what income we would use.
The interest rate on this particular product is typically 1-1.5% higher than the traditional conventional 30-year fixed. The cost in is usually higher in points, roughly 2-4% depending per case.
A product that I usually go with is our 'No Ratio'/'DSCR' where we don't look at the income whatsoever.
Purchase / Rate Term: Primary & Second Homes (DSCR is for Investment Properties)
80% LTV - 700 credit score, 12 months reserves
75% LTV - 680 credit score, 12 months reserves
70% LTV - 660 credit score, 12 months reserves
There is cash-out refinance options as well on this No Ratio. Would love to connect and talk more on it if there's additional questions and go more in depth.
Hi@Anna Cerda, I’ve done quite a few bank statement loans in the past and would be happy to share any information and answer any questions that you may have. Feel free to reach out. I’m located in South Florida as well!
Lender Louisiana (#1039511), Georgia (#1039511), and Florida (#1450514)
I used this type of financing for a property I already owned. I got a DSCR loan where essentially I had to share the lease, checks from tenants, bank statements showing I had reserves, etc. It was fairly easy but it is not cheap. Expect to be around 8-9% right now if you need to get this kind of loan on an investment property. And if you are buying in FL, that will make it tough to cash flow unless you get a really great underpriced deal.
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Quote from @Ray Hage:
I used this type of financing for a property I already owned. I got a DSCR loan where essentially I had to share the lease, checks from tenants, bank statements showing I had reserves, etc. It was fairly easy but it is not cheap. Expect to be around 8-9% right now if you need to get this kind of loan on an investment property. And if you are buying in FL, that will make it tough to cash flow unless you get a really great underpriced deal.
DSCR Loans have come down in rate a good amount last couple months - probably more the 7-8% range right now rather than 8-9%
Quote from @Raymond J. Rodrigues:
Hi@Anna Cerda, I’ve done quite a few bank statement loans in the past and would be happy to share any information and answer any questions that you may have. Feel free to reach out. I’m located in South Florida as well!
Thank you. Right now I am looking for a four plex but it has been extremely challenging. Everything is excessively over priced.
@Anna Cerda, where are you looking to buy and at what price point?
Lender Louisiana (#1039511), Georgia (#1039511), and Florida (#1450514)
Quote from @Raymond J. Rodrigues:
@Anna Cerda, where are you looking to buy and at what price point?
Fort Lauderdale area- there are not too many areas that have multifamilies.
@Anna Cerda, that is true. Are you buying this property as a primary residence or investment? Are you working with an investor focused realtor as of yet or are you searching on your own?
Lender Louisiana (#1039511), Georgia (#1039511), and Florida (#1450514)
@Anna Cerda I'm a local agent and investor here in South Florida. I have two off market multifamilies I'm currently working on in Fort lauderdale. Believe it or not there are lots of opportunities in Fort Lauderdale, Hollywood and Dania Beach right now. After these cities were hit by record breaking rain falls in April of this year several properties have come across my desk from flood damage. There are alot of tired landlords that don't want to spend the money to rehab them and start all over again.
Quote from @Adam Schooley:
@Anna Cerda I'm a local agent and investor here in South Florida. I have two off market multifamilies I'm currently working on in Fort lauderdale. Believe it or not there are lots of opportunities in Fort Lauderdale, Hollywood and Dania Beach right now. After these cities were hit by record breaking rain falls in April of this year several properties have come across my desk from flood damage. There are alot of tired landlords that don't want to spend the money to rehab them and start all over again.
Hi Adam, I am a realtor in NJ and are looking to relocate. Do you have any properties performing at least 10% cap rate
Quote from @Raymond J. Rodrigues:
@Anna Cerda, that is true. Are you buying this property as a primary residence or investment? Are you working with an investor focused realtor as of yet or are you searching on your own?
I am working in my own. Its be really hard to find a good realtor - they all seem disconnected.
Quote from @Julia Knurova:
Hi Anna,
We have a variety of different bank statement loans, we can use multiple accounts if necessary up to 5 to calculate your income. We also have programs starting just at 10% down payment for a bank statement loan for highly qualified borrowers. The process is very easy and smooth, if you are interested in chatting more, do not hesitate to contact me and we can discuss your situation more in detail.
Thank you. I am looking to buy a 5+ unit using bank statement. I have excellent credit and would love to know if I would qualify for 10% without running my credit.
@Anna Cerda could you please confirm property location (zip), and if you will occupy one of the units or rent all of them, and how many units exactly.
Quote from @Julia Knurova:
@Anna Cerda could you please confirm property location (zip), and if you will occupy one of the units or rent all of them, and how many units exactly.
I am still looking at different options. I will not be moving in to the units initially.
If you want more than 5 units, the minimum down payment would have to be at least 20-25%, especially if all are going to be non-owner occupied units.
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This is not a conventional qualified mortgage. It is for self employed persons who have been in business in the past two years.
There are many types
3 12 or 24 months in the past one account. Rates higher for the 3, lower for 24
Business or personal type account
All deposits are scrutinized carefully. The deposits have to line up with the type of business. For example a beauty salon has many deposits of $30- $200 but not $10000 in an even amount. The $10000 gets questioned where it came from and it can't be from same owner accounts moving money back and forth. Some programs ask for letter from CPA to explain business type if there is no clear website reference or how much money is expensed for number of employees. All business types are different. Most Underwriters have a chart with the percentage of expense to hit the particular type of business. Work from home single person operator who only pays for internet and phone being the lowest expense type. It needs to make sense.
In addition to the income component a borrower has to show reserves. Reserves are all the bills on the mortgage report, plus rents paid multiplied by 12 or 24 months. With 12 the rate is higher than if a borrower has 24. Reserves are not secured it just demonstrates borrower can make 12 or 24 payments in the future if there is vacancy or disaster.
FICO mortgage middle score is also used in pricing. NonQM wants strong deals- I think this is the best way to explain. This is a bit easier than conventional qualified mortgage but no where in the range of hard money. The loans are sold in a different secondary market.
Borrower completes traditional 1003, title and escrow, impounds often required, property has to be in good to great condition, 1-7 units allowed, leases and deposit checks at closing, usual TRID rules do apply.
@Anna Cerda no there is NO bank statement loan for 5 units with 10% down non owner occupied, none.
Send in your bank statements, tell me your mortgage middle FICO, business type and I can give you a range of what is possible
Minimum of 12 months consecutive bank statements required and the max debt to income ratio is 50% and the 12- or 24-month average must come from the same bank account. The good thing about this product it's easier to qualify due to it only review based on your income deposits from your bank statement vs a full doc loan like conventional where you have to document your paystubs, tax returns for self employed and other set of docs if you have properties. @Carlos Valencia @Albert Bui