Bank Statement Loans in California
Traditional mortgage applications can feel like navigating a bureaucratic maze. Self-employed entrepreneurs and business owners often find it difficult to get the financing they need through these channels. While they have the income to afford a home, their tax returns don’t tell the complete story of their financial stability. However, with our bank statement home loans, decisions are based on real-world value.
Borrowers in California find bank statement loans particularly valuable, especially given the state’s diverse economy and high cost of living. No matter how much income an individual or business pulls in, many financing options simply don’t cut it. At Westpark Loans, we offer an alternative path to homeownership that sidesteps many of the hurdles created by conventional lending requirements. For businesses that need access to bank statement loans in California, we’re often the first choice.
Bank Statement Loan Features and Terms
| Feature | Bank Statement Loans |
|---|---|
| Loan Type | Real estate-secured loan |
| Lien Position | 1st and 2nd Position Loans, and 2nd Position HELOCs |
| Loan Term | 10-30 years |
| Interest Rates | Fixed and Adjustable Rates Available |
| Loan Amount | $100,000 minimum |
| LTV | Up to 90%; Cash out up to 80% with only 3 months seasoning |
| Credit Score | 600 min (660 for interest-only) |
| Occupancy | Primary residences in California; investment properties nationwide |
| Property Types Allowed | 1-4 unit residential |
| Prepayment Penalty | Flexible |
| Closing Time | 30-45 days |
What is a Bank Statement Loan?
Bank Statement Loans allow borrowers to qualify for a mortgage based on their bank statements instead of traditional income documentation, such as tax returns or W-2s. This method involves analyzing the deposits in the borrower’s bank statements to determine their income, making it easier for self-employed individuals to secure financing.
Bank Statement Loan Features and Benefits
Flexible Income Verification: Bank Statement Loans enable borrowers to use 12 months of bank statements to verify their income, simplifying the qualification process.
No Tax Returns Required: Borrowers do not need to provide tax returns or complete a 4506C form, reducing paperwork and streamlining the approval process.
Competitive Interest Rates: These loans offer competitive interest rates, ensuring affordable monthly payments.
High Loan-to-Value Ratios: Borrowers can benefit from LTV ratios as high as 80% for cash-out refinances, ensuring substantial financing.
Unlimited Cash-Out: For LTVs of 65% or lower, borrowers can enjoy unlimited cash-out, providing flexibility for their financial needs.
Usable Assets: Borrowers can use 100% of checking and savings accounts, 90% of stocks, bonds, and mutual funds, and 70% of retirement accounts (80% if of retirement age) as assets.
Who Would Benefit from a Bank Statement Loan?
Freelancers: Freelancers with variable income streams can use alternative documentation loans to finance property purchases, leveraging non-traditional income verification methods.
Gig Economy Workers: Individuals working in the gig economy can access financing through alternative documentation loans, bypassing the need for traditional employment verification.
Real Estate Investors: Investors with fluctuating income can use bank statement loans to qualify for property financing. Bank statements are used to verify income, making it easier for investors to secure loans.
Small Business Owners: Business owners with inconsistent revenue can benefit from bank statement loans. Using business bank statements, they can qualify for property loans and expand their portfolios.
Self-Employed Borrowers: Self-employed individuals can leverage bank statement loans to secure financing. Providing bank statements instead of traditional income documentation allows them to invest in real estate.
Bank Statement Loan Example
David and Mia, successful small business owners, wanted to purchase a new home in San Francisco but had difficulty providing traditional income verification documents. They approached Westpark Loans for a Bank Statement Loan.
Property Details:
- Location: San Francisco, California
- Purchase Price: $1,500,000
Loan Details:
- Loan Amount: $1,275,000 (85% LTV)
- Loan Term: 30 years
- Interest Rate: Fixed
- Income Verification: 12 months of business bank statements
Westpark Loans approved the Bank Statement Loan in 30 days, allowing David and Mia to purchase their new home without the hassle of traditional income verification.
Frequently Asked Questions
Bank statement loans are used for borrowers who prefer to qualify using bank statements instead of tax returns.
Typically, 12 months of bank statements are required.
Yes, they are ideal for self-employed borrowers with non-traditional income.
The minimum credit score requirement usually starts at 600.
Yes, they can be used for cash-out refinances with LTVs as high as 80%.
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