How to Qualify for a Bank Statement Mortgage in Texas
To qualify for a non-QM bank statement home loan, borrowers must meet income and expense calculations and credit requirements. Here's how income is calculated:
- Lenders review 12 or 24 months of your bank statements
- They calculate monthly income by averaging deposits over the statement period
- Lenders apply an "expense factor" (usually 10-50%) to account for business expenses
- The resulting number is used to determine the borrower's debt-to-income ratio
Texas Lenders look for the following issues
- – Consistent monthly income
- – Few overdrafts or insufficient funds
- – Deposits that align with the borrower's claimed business type
- * Any non-business deposits are subtracted out.
Credit score requirements in Texas generally range from 660 and above depending on the lender and loan amount. Some Texas-based lenders may offer more lenient credit requirements for strong borrowers in other areas. The best bank statement loan rates are offered to borrowers with credit scores over 760.
Debt-to-income ratios for bank statement loans in Texas range from 43% to 50% which may be higher than conventional loans at a nearby bank. The flexibility of provign income through bank statements accommodates the varying income patterns of self-employed borrowers.
Required Down Payments
Down payment requirements for Texas non-QM loans vary depending and loan size. In general, they start at 10-percent down up to $3 million. Otherwise, a 20% or more down payment is required depending on the loan amount, tri-merge credit scores and DTI ratios. Higher down payments or lower interest rates through a paying a discount point are necessary when your debt ratios are over 50.