So you might be asking, "what happens if my business is operating with expense ratio lower than 50%?"

Great question.  Many businesses operate with an expense ratio well below 50%.  If that's the case, simply provide a letter from a licensed tax professional that states the accurate expense ratio for your business.  For example, if your business is operating at a ratio of 30%, then you can multiply the figure in step 4 above by 70%.  If it's 25%, then multiply by 75%, and so on...

There are no prepayment penalties for owner occupied and second homes, so the loan can be refinanced if desired, as soon as the applicant qualifies for a traditional home loan.  Many of our clients use this program to buy their dream home and decide to refinance it into a traditional loan once they and their tax advisers determine the optimal time.  It allows the business owner to take control and buy a home on their terms.

Get to know more with free info and resources to help you quickly get familiar this exciting program--check out our Bank Statement Loan Video Workshop.

Some lenders may offer this type of program, but few of them offer the educational resources and experience, making us a trusted leader in Bank Statement Home Loan financing.

BANK STATEMENT HOME LOANS

USE THE DEPOSIT INCOME FROM YOUR BUSINESS BANK STATEMENTS TO QUALIFY FOR A HOME LOAN INSTEAD OF TAX RETURNS.

WE SIMPLY CALL IT THE BUSINESS OWNER'S SECRET WEAPON.

Are you Self-Employed for at least 2 years? Have you been denied for a traditional home loan by your bank or credit union because you "didn't show enough income on your tax returns?"

You're not alone.  This happens to business owners from coast to coast.  The reason has to do with the way banks are forced to count your income using the taxable income on the business owner's tax returns. The US tax code allows business owners access to a set of rules that serve as a tax defense strategy.  Tax professionals have an entire industry dedicated to lowering the tax burden of business owners.  Operating a business with an aggressive tax strategy means life is great for the business owner....until they go to apply for a mortgage!  

THE PARADOX OF BEING SELF-EMPLOYED...

While business owners have a set of tax rules, so do the banks and credit unions. On a "traditional" home loan (such as a Conventional, FHA, VA or USDA program) banks and mortgage lenders are only allowed to use your tax returns to determine your ability to make the monthly payments on a new mortgage.

In short, if you tell Uncle Sam that you're 'broke' on your tax returns, your bank or credit union will see it the same way. And that's how many business owners see their applications denied.

THE SOLUTION: THE BANK STATEMENT LOAN.

Our bank statement loan program solves this problem.  Rather than using tax returns, we allow the business owner the ability to use the ordinary business deposit income in their bank statements as the income on the new loan. We find that it often provides a more accurate portrait of the applicant's true income profile and business profitability.    

HOW DOES IT WORK?

The calculation process is simple and straight-forward.  Here's how we calculate the qualifying income on a Bank Statement Loan:

1. We review the most recent 12-24 months of your business bank statements, counting all of the ordinary business deposits.
2. Divide the figure ($) by the number of total bank statements being reviewed.
3. Multiply this figure X your ownership percentage (%) in the business.
4. Multiply this number X 50% (this is a default business expense ratio that is applied to the income)

And that figure becomes the monthly income for your new loan.