Are you self-employed and looking for a house in Texas? In the ever-changing US economy, people are choosing freelancing gigs over full-time jobs. Enjoying the freedom and flexibility of self-employment, people are striking out on their own. However, such contract workers do not have regular tax returns or pay stubs. When you are opting for a conventional mortgage, this is what you essentially require. On the contrary, there is a bank statement house mortgage meant for aiding self-employed people with their first residence.
For successfully achieving the bank statement home loans, you need to show bank statement, W2 information and pay stubs or tax returns. Additionally, you need to submit 2-year freelance work history for getting the mortgage with a low-interest rate. People with seasonal jobs can also apply as long as they meet the requirements. However, many people are still unaware of the advantages of choosing such mortgage products.
Here we have jotted down how you can utilize bank statement house loan so that you can make the most out of it later.
Shaping your Dream into Reality
For buying your first home, bank statement loan is a boon to seasonal or self-employed people. Not only is it for your first primary residence but it can also be for a second home, trade-up home, or holiday home. In some of the situations, you can also use the loans for investing in a property which you are renting out for only a short-term period.
Getting an Equity the Other Way around
If you are looking for a way to do cash-out refinancing, bank statement loans are great. Putting it in simple words, the current mortgage with a high balance is replaced by cash-out refinancing. You can put the money coming out of the two loans in the expenses. Hence, you need not worry about saving money for major home improvements or renovation.
Refinancing the Current Loan
When you already have a loan, you can use the bank statement for refinancing. As you are a freelancer or running own business, the loan comes quite handy. Especially, when you are buying your first home, you can keep this perk in mind. One of the huge reasons for refinancing is to reduce the monthly payment. In case, the current loan interest rate is higher than the market interest rate, refinancing gets a lower interest rate. Needless to say, you can save more on the monthly payment and pay less on the long-term interest rate. On top of it, if you have adjustable-rate mortgage, refinancing is particularly helpful. The adjustable-rate mortgage has a low-interest rate, the rate also changes after completing 3, 5, 7, and 10 years.
Even if you have a commission-based salary, you can still go for the mortgage product. Similar to other people’s situations, tax returns and bank statements are also needed. Moreover, retired people can submit an application for it without providing a paycheck. In the end, you may face confusion while going through with the whole situation. Don’t forget to call a professional lender!
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.