Ask Terry Questions Bank statement mortgage loans

Bank statement mortgage loans

By Terry Savage on January 01, 2021 | Housing / Real Estate

Can you tell me the pros and cons of bank statement loans and a legit company that provides them? I live in Chicago.

Terry Says

Remember 2008 — those no documentation, no down payment loans that led to foreclosures in the crisis? Today’s bank statement loans made — typically to self-employed — rely only on bank statements for documentation of income such as a W-2 form. These people don’t fit nicely into the qualification box for a traditional mortgage.
The loans likely require only 10% down — a cushion for the bank if they have to foreclose. You’ll pay a much higher interest rate, because the loans are riskier to make. Plus there’s a lot of fine print in the contract that could cause you to lose your home if you miss more than one payment!

I suggest you go to major banks or mortgage companies like Quicken Loans (Rocket Mortgage) or Guaranteed Rate to search for this type of loan. Lots of smaller companies are springing up to make these loans –and they won’t be friendly if you miss a payment.

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