How to look at our Bank Statement Product
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Bank statement program – alternative - self employed
Foreclosure, BK or loan modification: – only require seasoning
12 months – (.50% rate hit if seasoned less than 36 months)
FICOS AS LOW AS 620 – All property types, including n/o &
units
ARM PRODUCT – INTEREST ONLY AVAILABLE
Allowed up to 10 financed properties, including subject (if all
income is from rental, must go full doc)
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Only 1 year 1040’s or W2 for salaried or commissioned
employees (requires 2 yr. same business)
Gifts okay after 30% down.
FTHB’s okay to 43% DTI; Otherwise max ratios to 55%
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No seasoning for rate/term or cash out.
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(investment to 50%).
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PURCHASE, RATE AND TERM, CASH OUT
OWNER OCCUPIED, 2ND HOMES AND INVESTMENT
W2 or STATED INCOME (can combine both)
MINIMUM $50,000 – MAXIMUM $2,500,000
BORROWER PAID ONLY
ALL HITS ARE TO THE RATE – see rate sheet
ARMS – 5-1; Caps 5-2-5; INDEX 1 YR LIBOR; MARGIN 3.75%
(CURRENTLY AT 4.75 PAR) Disclosure need to be accurate!
INTEREST ONLY available for .250% Rate Adustment
Self Employed for 2 years – we do not verify with a 4506T;
when combined with a W2; W2 income will require a 4506T
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12 months of personal bank statements to determine income
derived from the business (income stated on the 1003)
Income is considered to be transfers or deposits from
business accounts, deposits from business accounts thru an
ATM or payroll check deposits. Deposits divided by 12
months – enter on 1003.
Twelve month P&L prepared by BORROWER or 3rd party
CPA/tax preparer and covering the same time period to
further validate the “income” shown in the bank statements *.
CPA/tax preparer’s attestation of borrower’s percentage of
ownership and that the borrower has been self-employed in
the same business for a minimum of 2 years.
*P&L net income doesn’t need to match 1003 income.
Looking to see that deposits make sense to income.
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Corporation where 100% of shares are owned by borrower, single
member LLC, single partner partnership or sole proprietor.
Validation of percentage of ownership may be thru Articles of
Incorporation, state DOC, etc.
Most recent 12 months P&L “certified” prepared by CPA/tax
preparer. Three months of personal bank statements are required
to commensurate with the net income shown on the P&L. Net
income to go on 1003.
CPA Tax Preparers' attestation of borrower’s percentage of
ownership and that the borrower has been self-employed in the
same business for a minimum of two years.
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Option 3: Available to any borrower with a 25% or greater ownership in a
business
CPA/TAX preparer letter stating the net business income taken by borrower
over the last 12 months. Net income per CPA stated on the 1003.
Most recent three (3)months personal bank statements must be in line what
business shows as income. Has to make sense. (If 100% ownership, it can
be either business or personal returns to show the income.)
CPA/tax preparer’s attestation of borrower’s percentage of ownership and
that the borrower has been self employed in the same business for a
minimum of two (2) years.
Tax Preparer – defined as someone who is licensed, can look up on line, etc.
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Available to any salaried or salary plus commission borrower
Most recent one (1) year tax return or most recent W2 (income
shown on 1003 with current paystub showing YTD income.
Most recent two (2) months personal bank statements to validate
required reserves
Processed 4506T – IRS transcripts required.
A CPA/tax preparer’s attestation that the borrower has been in the
same business for a minimum of two years.
All individual deposits counted if less than 50% of monthly income
stated. Each deposit equal to or greater than 50% of the monthly
income figure must be sourced.
Deductions: Transfer, NSF fees, returns, insurance refunds, etc.
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Rental Income – 75% of lease minus PITI+HOA
Departing residence requires 30% equity
Reserves – minimum 6 months, max 18 months depending
on loan amount + 2 mos. for each additional n/o/o property.
Residual income required if DTI 43.01% or higher
POA’s not allowed.
All inquiries on credit report must be explained.
Each derogatory credit must be explained.
ARM disclosures must be accurate – see notes on ARM
product