What is a 24 Month bank statement loan? Well, you may have been reading there are 1 month bank statement loans, 12 month bank statement loans, asset as income loans and more. The 24 month bank statement is based on 2 types of bank statements. They are the following:
- Personal Bank Statements: Will use 100% of the deposits.
- Business Bank Statements: Typically only 50% of deposits.
- Note: Mix of Personal and Business Bank Statements: (Banks are just starting to look into this option)
Now, there are reasons you may want to go with one option versus the other. Primarily if a certain account has more than let’s say 3 NSF’s in a 24 month period. If you do, you may have a legitimate reason and an LOE (letter of explanation) may suffice.
How do you Qualify for a 24 Month Bank Statement Loan?
You will be graded on various factors including property type and more. Here is a list and feel free to download our checklist.
- FICO score: When your credit is pulled, you will be given 3 scores. Banks will use the middle score! Will there be a co-borrower on the loan? Is the co-borrower W2’d? The 24 month bank statement program guidelines in many instances allows for blending bank statements with the co-borrower’s W2’s.
- DTI ratio: Once the underwriter determines your income based off your bank statements, and determines your monthly debts, a DTI (debt to income) ratio will be determined. Typically below 43% is acceptable but in certain cases can go up to 50%. Please note, the higher the ratio, the higher the interest rate adjustment.
- Property Type: Currently bank statement loans are for single family residences, 2-4 units, condos, non-warrantable condo, 2nd homes, vacation homes.
What can go wrong while doing a 24 Month Bank Statement Loan?
First of all, you need to work with a Mortgage loan originator who actually studies this type of loan. It’s different than the Fannie Mae / Freddie Mac loan. It has many pitfalls and loan declines are high. To combat this, click here to have a qualified Non-QM specialist help you through the process.
In the meantime, you will want to gather the needed documents and present them to your mortgage loan originator.
List of documents needed for a 24 month bank statement loan
- 24 Month bank statements. All pages. Even if the last page is blank. Cannot be a printout of your bank screen.
- A completed 1003 mortgage loan application.
- Copy of Drivers Licence
- Get our 19 things to know Free Report here.
Interested in speaking to someone today? Call 1-888-240-1991 to learn more about the 24 month bank statement qualifications process.