Are you having trouble gathering sufficient knowledge for the bank statement home loan in Houston? Read the article now!
Finding a home loan is pivotal if you are going to purchase the first home in life. You are going to compare the pros and cons, run numerous scenarios in mind, and analyze the situations – it’s all exciting and overwhelming. But did you know your self-employment can be a factor? Freelancers do not have regular salaried jobs. This fact puts a dent on their purchasing power if you are looking out for a conventional mortgage.
The bank statement home loans in Houston are available for those who are entrepreneurs, seasonal workers, freelancers, and gig workers. Millennials prefer the beauty of working at their convenience instead of staying in the office for 9 or 10 hours. Unfortunately, traditional or government-backed home loans do not regard them as potential borrowers. The mortgages have income requirements that the buyers need to pass. For example, not every freelancer collaborates with the same organization for 2 years in a row. But the lenders of FHA loans or conventional mortgages frown upon career gaps. If you are self-employed, bank statements for consecutive 12 months matter. As you would like to learn more about how the home loan serves you, go through the next section.
Basic Requirements for Bank Statement Home Loans
The local lenders in Houston ask the borrowers to pass certain eligibility criteria. Of course, the requirements vary from loan officer to another. As you have already assumed the bank statements play a major role in eligibility, look closer. The first part of passing the requirement demands bank statements from a business or personal account. If you submit business bank statements, you need a deposit of $20,000 every month. In case you are going with personal bank statements, you require a deposit average of $10,000 per month. Besides documenting the statements, make sure you have a proof of self-employment for at least two years from a corporation or DBA. Borrowers also need to furnish documents related to residency or citizenship.
Check the Credit Score Requirement
If you wish to own a house, your credit score is essential. The three-digit FICO score indicates whether you are at risk or not. The higher your credit score is, the lower your mortgage rate is. Now, the lenders ask at least 550 scores for the bank statement home loans. Many freelancers choose not to work for sometimes, again some of them cannot find work consistently. Due to several reasons, their credit score stands in a tumultuous situation. If you can prove a 550 score, you can apply for the mortgage. However, high mortgage rates can be reasons for woes. Figure out ways to improve the credit scores. Paying off outstanding balance is one of the best methods to maintain steady FICO scores. It is better to take time and work on credit scores before applying for the mortgage.
Bank statement home loans do not demand mortgage insurance even if you put a 10% down payment. Higher loan limits along with the ease of purchasing investment properties are a huge benefit for many. So, start looking for a lender now!