While specific guidelines for Bank Statement Purchase Loans can vary depending on the lender, here are some common requirements and considerations:

• Borrowers must provide proof of self-employment or business ownership, typically through business licenses, articles of incorporation, or other relevant documentation.

• Lenders usually require 12 to 24 months of personal and/or business bank statements. These statements are used to evaluate the borrower’s income stability, cash flow, and ability to repay the loan.

• Lenders will review the bank statements to calculate a borrower’s average monthly income. They may consider deposits made into the account and may make adjustments for non-recurring or irregular deposits. Some lenders may also deduct business expenses or consider non-cash deductions to arrive at a net income figure.

• Lenders assess the borrower’s debt-to-income ratio, which compares their monthly debt obligations to their income. While specific requirements can vary, lenders generally aim for a DTI ratio below 43%. This includes both existing debts (such as credit card payments, student loans, and auto loans) and the projected mortgage payment.

• While credit requirements may be more flexible compared to traditional loans, lenders will still evaluate the borrower’s credit history to assess their overall creditworthiness. A higher credit score generally improves the borrower’s chances of qualifying for a Bank Statement Purchase Loan and obtaining more favorable terms.

• Lenders may require a larger down payment for Bank Statement Purchase Loans compared to traditional loans. The specific down payment amount will depend on factors such as the borrower’s creditworthiness, loan amount, and the lender’s guidelines. Generally, a down payment of 10% to 20% is common, but it will vary depending the individual’s circumstances.

• Lenders may require borrowers to have sufficient reserves in their bank accounts to cover several months of mortgage payments and other living expenses. The exact reserve requirements can vary depending on the lender’s guidelines and the borrower’s financial profile.

These guidelines are general and can vary among lenders. Each lender will have its own specific criteria and underwriting process for a bank statement purchase loan.  At Loan Bliss, we specialize in Bank Statement qualifying loans and we compare different lenders and their specific guidelines so that you attain the best loan available.