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Bank Statement Loans: A Unique Approach for Your Borrowers

November 2, 2022
Self-employed borrowers require different calculations for mortgage loans. Learn how income, revenue streams & expenses should be calculated.

Bank statement loans help self-employed borrowers qualify based on their actual income, rather than the number that appears on their tax returns.

Non-traditional borrowers, such as business owners, the self-employed borrowers and high-commission sales workers, always have faced challenges documenting income. At LendSure, we have the answers that can help you overcome those obstacles and say “yes” in these scenarios.

Gaining the full picture into a business owner’s income stream can be tricky. It’s not just about analyzing one set of bank statements. Understanding a business’ income and expenses may require examining multiple sets of bank statements as well as various other income sources. Getting all the information needed takes asking the right questions, which isn’t always obvious.

At LendSure, we start our underwriting process for bank statement loans with a simple rule: We don’t presume all business owners manage their businesses the same way. Underwriting for agency loans is a straightforward matter of looking at W-2s, which have very little wiggle room. But digging into bank statement loans requires quite a bit more due diligence.

We know there’s no one way for a business owner to set up their bank accounts. Here are some scenarios we’ve seen recently:

The restaurant owner

There’s no one way to run the books at a restaurant. It’s quite possible that a food-service entrepreneur has separate bank accounts, one for cash receipts and another for credit card payments. And many restaurateurs have multiple locations, with separate bank statements for each. If we looked at just one of those accounts, we wouldn’t get a full picture of the borrower’s finances.

The doctor

A physician’s office might use one bank account for insurance company reimbursements and another account for payments made directly by patients. This can be an easier way to run the business—but if an underwriter doesn’t look at activity in both accounts, the doctor might not qualify for a loan. And a practice with multiple locations likely has multiple bank statements.

The landlord/artist/musician combo

We recently worked with a married couple who had separate bank accounts, one for income on rental properties, and a second account that showed their receipts from their businesses—she’s an artist, and he’s a musician. The broker hadn’t supplied us with the statements from the second bank account, and the rental income alone wasn’t enough to qualify the couple for a mortgage. We asked the broker to put us in touch with the client, and we quickly had enough information to approve the couple for a loan.

LendSure’s Variable Expense Factor

In another example of our flexibility, we don’t have a one-size-fits-all expense factor. For instance, an engineer or programmer who works from home has few expenses for such things as office rent and cost of goods sold. An auto mechanic or retailer, on the other hand, has much higher expenses for facilities, labor, and supplies. We don’t apply cookie-cutter underwriting to these very different types of businesses.

LendSure’s Solutions-Driven Approach

At LendSure, we take the time to really understand the self-employed borrower’s situation. For instance, some business owners have a separate account for payroll, and before each payday, the business owner transfers money to that account. If we assumed that both bank accounts represented revenue streams, we’d over count the borrower’s income.

As part of our process, we realize that borrowers bring many financial scenarios. So we combine bank statement income with W-2 income, if the borrower has it, and with asset qualifier/depletion calculated income, when applicable.

The bottom line is that we’re willing to listen to your self-employed borrowers and to learn about the details of their business. We invest time and energy into the transaction as we gather a full picture of the borrower’s finances. At LendSure, we take the time to understand how borrowers manage their accounting.

At LendSure, we specialize in non-QM, and we’re here to help you. Our highly experienced loan management team knows the non-traditional mortgage process inside and out. Working extensively with bank statement loans and many other types of non-QM loans, LendSure lends in 40-plus states and is continually expanding throughout the United States. We guide mortgage professionals like you through the non-QM loan process, ensuring the right product fit for each client.

At LendSure, we know not all loans are traditional loans that follow a simple, cookie-cutter process. We empower our network of partner mortgage brokers to offer customized solutions to borrowers of any type. With ongoing education, matchless support, a common-sense approach to the numbers and a careful look at the details, LendSure guides brokers through the sometimes-confusing world of non-QM loans.

Non-QM products don’t have to be complicated when you work with the right partner. Bank statement loan qualification may take a few extra steps, but LendSure guides brokers like you through each step of the process. We know you’re working fast and furious and always looking to grow your business, but sometimes a little help is needed.  Whether you need guidance on bridge loans, assistance working through the bank statement loan process, help with investment property loans, or are simply looking to expand your product offerings, LendSure can help. We’ll help you say “yes” to more clients, flesh out marketing opportunities, expand your business and grow your bottom line.

The LendSure Way

It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are numbers and ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan.  We work hard to offer our commonsense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently owned property.

Are you ready to grow your business? Conforming loan approval guidelines can be restrictive, but we want to offer our mortgage broker partners the education, tools, support, and guidance they need in order to say “yes” to more of their clients.  This ensures happy borrowers and opportunities for bottom-line growth. What are you waiting for? Let’s get started!

Are you ready to benefit from a commonsense approach to lending?  Contact us today to learn more about non-QM loans, self-employed borrowers and how partnering with LendSure Mortgage Corp. can help grow your bottom line.







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