12 & 24-month Bank Statement Loans in Texas

Bank statement loans offer a pathway to homeownership for self-employed Texans who might struggle to qualify for traditional mortgages. These loans use bank statements to verify income instead of tax returns making them particularly attractive in the Lone Star State's entrepreneurial landscape.

Texas boasts a thriving self-employed population. According to the Texas Workforce Commission, approximately 1.3 million Texans were self-employed as of 2023, representing about 10% of the state's workforce. This sizeable group includes freelancers, contractors, consultants, small business owners, and corporate officers with 25% or more ownership in their companies.

TX Bank statement loan lender

What occupations are a good fit for this type of loan?

Self-employment in Texas spans various small- to medium-sized business industries:

Bank statement loans cater to these diverse professionals and provide a flexible financing option tailored to their unique income situations.

How Bank Statements Loans Work in Texas?


Eligibility typically requires:

– Self-employment for at least 2 years. (1 yr allowed with exception)
– Either a personal or business bank account separate from personal finances
– Steady, documentable income deposits


Documentation needed often includes:

– 12-24 months of personal or business bank statements
– Proof of self-employment (e.g., Texas business/professional license or CPA letter)
– Texas Secretary of State registration documents (DBA, corporations and LLCs)
– Personal and business tax returns are not requested or used.

Unlike traditional mortgages, which rely heavily on tax returns and W-2 forms, bank statement loans focus on work related deposits. This approach benefits Texas business owners who may have significant write-offs that reduce their taxable income on paper.

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:

  1. Lenders review 12 or 24 months of your bank statements
  2. They calculate monthly income by averaging deposits over the statement period
  3. Lenders apply an "expense factor" (usually 10-50%) to account for business expenses
  4. The resulting number is used to determine the borrower's debt-to-income ratio

Texas Lenders look for the following issues

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.

Your fees may be reduced substantially with a closing cost credit. Please discuss with a loan officer.

Rates and terms vary based on credit, market conditions, and other factors. Payments exclude taxes and insurance.
This is not a commitment to lend. Rates subject to change without notice.

 

Texas Home

Benefits of Bank Statement Home Loans

This loan is not as strict as traditional lending and provides several advantages for self-employed Texans:

  • Alternative Income: These loans accommodate irregular income patterns common among small business owners and freelancers.
  • Overcome tax write-off challenges: Self-employed individuals often use deductions to minimize taxable income. You may qualify on a potentially higher net profit.
  • Supports diverse businesses: From tech startups in Austin to oil consultants in Houston, bank statement loans adapt to various business models prevalent in Texas.
  • Higher loan amounts: Bank statement lenders lend up to $5 million which helps high-end property values in luxury neighborhoods such as West Lake, Barton Creek, Highland Park, Memorial or the Dominion.

Popular areas for self-employed homebuyers in Texas

Flexible income calculations help borrowers qualify for more expensive homes in appreciating markets.

 

Expert Tips for Texas Bank Statement Loan Applicants

Advice from Texas mortgage professionals:

Prepare your Texas business:
- Implement professional bookkeeping practices
- Minimize personal expenses paid through business accounts
- Maintain consistent income patterns where possible

How to maximize your approval chances:
- Offer a larger down payment to offset perceived risk
- Provide detailed explanations for any hard to prove deposits or income fluctuations
- Work with a Texas licensed mortgage broker experienced in self-employed loans

We have multiple alternative income lending options available subject to underwriting approval.
Additional loan choices include Asset Based Mortgages in TX, P&L statement loan, No Income or Job Mortgage, and 12 Month Luxury Bridge Loans.

What borrower's tend to ask. Check these answers

Disclosure: Minimum loan amount is $200,000 for residential non-QM loans. Loan programs are subject to change per lender at any time until the loan is approved and the rate is locked. Borrowers must be approved by underwriting. Not all applicants will qualify.