Your Guide to Going From Self-Employed to Homeowner With Oregon Bank Statement Loans
Being self-employed or having a non-traditional income source in Oregon doesn’t necessarily mean you have to give up on your dreams of owning a piece of the Pacific Northwest to call your own. With two Oregon cities – Portland and Eugene – making it on the list of top 30 U.S. cities with the most self-employed workers, you’re not alone. Oregon bank statement loans can help your homeownership dreams become a reality.
In this guide, we’ll cover everything you need to know before getting an Oregon bank statement loan. Keep reading to learn more!
What Is a Bank Statement Loan?
A bank statement loan is a type of non-QM loan (non-qualified mortgage) that accepts bank statements as income verification – no need to provide tax returns, W2s, or pay stubs. Non-QM loans aren’t required to follow the strict lending rules enforced by the Consumer Financial Protection Bureau (CFPB), resulting in more flexible qualification requirements.
Who Is an Ideal Candidate for a Bank Statement Loan?
While there is no single “ideal” candidate for a bank statement loan, those with non-traditional income can certainly benefit from them. They can be a great option for individuals who are:
- Entrepreneurs
- Freelancers
- Gig workers
- Independent Contractors/1099
- E-commerce Professionals
- Individuals With Multiple Streams of Income
- Influencers
- Consultants
- Small Business-Owners
- Self-employed Lawyers and Doctors
- Artists
- Real Estate Investors
- Truck Drivers
However, you don’t necessarily have to be self-employed to get a bank statement loan – even if you’re a W2 employee, you can still qualify. All you need is a bank account with a history of regular deposits.
Bank Statement Loans vs. Conventional Loans: What’s the Difference?
Bank statement loans are non-QM loans that accept bank statements for proof of income instead of traditional income documents, making it ideal for individuals with a non-traditional source of income. In contrast, conventional loans are QM loans (qualified mortgages) that are required to follow the strict CFPB lending standards. Because of this, borrowers typically need higher credit scores and documents like W2s, pay stubs, and tax returns to qualify.
Qualification Requirements for Oregon Bank Statement Loans
There’s no set industry standard for bank statement qualification requirements and they tend to vary by lender. Here are our requirements at Defy to give you an idea of what you may need:
- Minimum FICO score of 620+
- 12-24 months worth of bank statements (personal or business)
- Maximum LTV of 90%
- Maximum loan amount of $6M
- Interest-only options available
Oregon Bank Statement Loan Interest Rates
Factors like the lender, your qualifications, and the current market rate all impact the interest rate you’d get for a bank statement loan. While they rise and fall similarly to market rates, bank statement rates tend to be slightly higher than conventional rates. Depending on your situation, this slightly higher rate can potentially be worth it for a chance to become a homeowner.
Where Can You Get an Oregon Bank Statement Loan?
Oregon bank statement loans are offered by banks, credit unions, and private mortgage lenders. When shopping for a bank statement loan, private mortgage lenders, like Defy, are typically more experienced with specialty loans. Choosing an experienced lender can speed up the closing process, while giving you tailored advice.
Pros and Cons of Getting an Oregon Bank Statement Loan
Pros:
- Opportunity to become a homeowner despite having alternative income
- Use your bank statements to qualify
- Faster approval process
- No tax returns or other income documents required
- Allows more people from different professional backgrounds to qualify for a mortgage
Cons:
- Limited availability
- Slightly higher interest rates
- Slightly higher down payment requirements
Oregon Bank Statement Loan Alternatives:
Bank statement loans can be a great option, but they’re not the only option out there. Non-QM loans come in all shapes and sizes with flexible requirements to help non-traditional borrowers find the perfect fit.
Below, we’ve listed a few alternatives to consider:
- Profit & Loss (P&L) Loans: Qualify using your business’ P&L statements.
- Asset Depletion Loans: Qualify using your liquid assets.
- Debt-Service Coverage Ratio (DSCR) Loans: Qualify using rental income.
Choosing the perfect loan doesn’t have to be difficult – let Defy help! Book a free consultation with us to review your loan options – we offer all of these and more.
Oregon Bank Statement Loan FAQs:
- What are bank statement loans?
Bank statement loans are a type of non-QM loan (non-qualified mortgage) that allows you to qualify using your bank statements instead of traditional income documentation, like tax returns, W2s, and pay stubs.
- How does a bank statement loan work?
To qualify for a bank statement loan, lenders will look at your average monthly deposits to gauge your income. This is calculated by adding up all of the deposits in a given time period and then dividing that total amount by the number of months. The average monthly deposit amount gives lenders a good idea of how much you can afford.
- Who can get a bank statement loan?
Anyone can! If you have a bank account that receives regular deposits, you can apply for a bank statement loan.
- What are the requirements for an Oregon bank statement loan?
Oregon bank statement loan requirements vary depending on the lender since each lender sets their own criteria. To give you an idea, this is what we require at Defy:
- Minimum FICO score of 620+
- 12-24 months worth of bank statements (personal or business)
- Maximum LTV of 90%
- Maximum loan amount of $6M
- Interest-only options available
- Is it possible to get a bank statement loan with bad credit?
While not impossible, it can be quite challenging to get a bank statement loan with bad credit. However, minimum credit score requirements for bank statement loans can vary greatly between lenders, meaning you may be able to find a lender who will accept bad credit.
- What is the minimum credit score required for an Oregon bank statement loan?
Minimum credit score requirements for Oregon bank statement loans depend on the lender, but at Defy, we require a minimum FICO score of 620+.
- Can you get an Oregon bank statement loan with no down payment?
No, a down payment is typically required to qualify for an Oregon bank statement loan.
- How big of a down payment do you need for an Oregon bank statement loan?
Down payment requirements for Oregon bank statement loans vary between lenders, but you can expect to put down anywhere between 10-25%.
- Are tax returns required to qualify for a bank statement loan?
No, tax returns are not required to qualify for a bank statement loan!
- Where can I get an Oregon bank statement loan?
You can get an Oregon bank statement loan from a private mortgage lender, or certain banks and credit unions. Private mortgage lenders, like Defy, tend to specialize in alternative loan products, making them more experienced with a faster closing process.
