Are you planning to purchase a home in the upcoming year? But are you worried whether your employment is a drawback? If you are a self-employed person eyeing a conventional mortgage, things can be tricky. But there is an alternative – bank statement home loans make a practical choice. Regardless of your self-employment type, the mortgage program is quite effective. When you fail to furnish pay stubs, your personal or business bank statements come into rescue.
The copy of a bank statement ensures you have adequate funds for the property you are willing to purchase. Lenders go over financial records before giving the final nod or fixing the interest rates. Also, the bank statements play a crucial role in establishing your financial health. Even though lenders do not have a preference, they ensure whether things are in place. When they have the statements on their hands, lenders can make an informed decision regarding loan approval.
But pre-approval comes before everything. Of course, it does not have the final say over the mortgage approval. However, you cannot ignore the preparation phase when looking for a green signal before the pre-approval. Let’s go through the essential tips for bank statement home loans in Houston.
Keep a tab on your credit
Before you ask the lender whether you can apply for a bank statement home loan, do one thing. Check your credit score to see whether it is in order. When there are errors, you can instantly work on it. Pay down outstanding balances and look at your available credit. It is pivotal to know whether you have been making payments on time. Low credit does not put an end to your dreams. Lenders often allow 550 credit scores. Stay responsible for your credit scores and borrow money in confidence.
Keep your paperwork ready
Documentation can be quite difficult when you are applying for the first time. But it is crucial for every loan process. When a loan originator inquires for documents, you should be ready to submit them right away. Every lender goes through the documentation at their pace, and you would not like to overkill. When applying for a bank statement home loan, collect personal and business bank statements. Meanwhile, you need to provide a self-employment license or submit registration documents. In addition to it, you also have to prove your citizenship status.
Why choose bank statement mortgages?
The bank statement home loans come with a bunch of perks. As freelancers and seasonal workers typically do not have regular employment; low credit scores among them are quite common. Besides the lenient credit guidelines, you can get 90% financing for 700 FICO scores. There is also no mortgage insurance when you are willing to pay for 10% down payment.
With so many benefits in line, are you not excited for a bank statement home loan? If you are a freelancer in Houston, go for it. Of course, don’t forget to keep these tips in mind. Find a mortgage lender before digging deeper. Good luck!