No Tax Returns, No Cry

While it never rivaled in popularity its sister reggae tune of genre-defining, historic significance, let’s dust off this platter and give it a spin. Because let’s face it, in the fully-documented world of today’s mortgage qualifications it would seem that if you’re self-employed, or if you’re a real estate agent who gets a 1099, you pretty much have to shoot the sheriff if you want to get a decent loan but don’t have two, strong years of tax returns. No more.

Our bank statement program may allow you to qualify with just 12 months of business bank statements. We’ll take into consideration the trend of deposits that might better depict the income the business truly realizes. We understand that since the time buffalo soldiers roamed the land, the self-employed have sought to minimize their income and maximize their deductions when filing with the IRS. So it’s no secret that, come time to apply for a home loan, the chances for success with a traditional mortgage go up in smoke.

Let’s look at how a bank statement qualification loan differs from a “full doc” qualified mortgage or “QM.”

  • We won’t ask you for tax returns.
  • We won’t ask you for profit and loss statements (P&Ls) or balance sheets for the business.
  • We won’t “pull” a 4506T.
  • We will look at total, real business deposits over a 12-month period and determine a monthly average of income. In the case of real estate agents, we’ll look at commission checks, for example.
  • We will apply an expense ratio to the income we derive.
  • We will document your funds to close (down payment, closing costs and reserves).
  • We will permit as little as 10% down payment.
  • We will permit FICO scores under 700 in some cases.

In years past, stated income loans covered the scenarios where the business owner’s competing goals of lowering taxes in the eyes of the IRS and increasing income to qualify for a mortgage in the eyes of the lender collided. And there’s no sign that stated income loans are coming back en force any time soon. With that door closed, our bank statement program is often the next best fit, and we’re happy to help you make sense of its application to your unique scenario. Get in touch any time to review.

Let all the people sing,


Robert J. Spinosa

Vice President of Mortgage Lending

Guaranteed Rate

NMLS: 22343

Marin Office: 324 Sir Francis Drake Blvd., San Anselmo, CA 94960

Berkeley Office: 1400 Shattuck Ave., Suite 1, Berkeley, CA 94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate. In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate’s Human Resources Department.

Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 – (866) 934-7283

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