If you are self-employed and want to purchase a house, paperwork might not get in your way. Freelancers do not have adequate proof of income; hence, rejection for the traditional loans is inevitable. Even though self-employed people lose their hopes, it should not be the way it is. Moreover, many of them fall prey to the myths and misconceptions.
For the self-employed borrowers, bank statement home loans in Houston are affordable mortgage products. The lender will check whether you are a potential borrower and then inform you about the estimated interest rates. Affordable rates are possible to get when the borrower is creditworthy. Again, for proving creditworthiness, you must have good credit and verifiable incomes. Amid the credible information, misinformation finds a way to creep in.
To help a seasonal worker or freelancer achieve homeownership, here are the common myths about bank statement loans busted.
Myth #1: Freelancers should get a regular job before buying a home
This misconception has been going around for ages because of the lack of paperwork. Even though the documentation process gets tricky, there is still hope for them.
As long as you have 12-month of business or personal bank statements, you can start preparing for the mortgage application. A two-year of self-employment legally documented by Corporation or DBA is also a must. The borrower needs to have a deposit of $10,000 per month in his/her personal bank account. If it is a bank account, the average amount of deposit amounts to at least $20,000 per month.
Those who think the freelancers are unable to furnish adequate documents, they are wrong. Most importantly, self-employed people need not join a 9-5 job to gather essential documents.
Myth #2: Loan benefits are not helpful
Buyers who have blind faith in traditional loans can only come up with such outlandish comments. The loan benefits are helpful for every self-employed borrower in the neighborhood.
If you have brilliant credit scores but did not get conventional loans for the lack of documents, the bank statement home loans can help. Moreover, the help extends to financing up to 90%. For this benefit, you might have to secure 700 credit. Additionally, after the buyer’s contribution, you can apply for gift funds.
You can refinance or buy a single-family second home. Moreover, you can buy a condo, multi-unit, PUD, or multi-unit property with the mortgage. The lenders also permit seller contribution on occupancy and down payment. If you are going to purchase a single-family residence, co-signers are available.
Myth #3: Passing eligibility requirements is not easy
The traditional loans ask for a high down payment, and many people might have told you the same is applied for the bank statement loans. If you put down less than 20%, you need to pay mortgage insurance.
However, bank statement mortgages do not require mortgage insurance when the borrower puts down 10% of the loan value. Besides the down payment requirements, you can prove eligibility with 500 credit scores.
As you can see, bank statement loans are a lot different than what you thought it would be, find a professional lender now.