Bank Statement Loans New Jersey Financing Solutions

If you’re a self-employed homebuyer or homeowner in New Jersey, you should know about bank statement loans.

With as little as 12 months of bank statements, you may qualify for a mortgage with no tax returns.

Not only is it easier to apply, but you also might qualify for more. Bank statement loans New Jersey are catching on, and it’s easy to see why.

How do New Jersey bank statement loans work?

Bank statement loan lenders realize that tax returns don’t tell the whole story. Self-employed applicants write off expenses – as they should. 

So, instead of looking at adjusted gross income from tax returns, bank statement loan lenders use 30-100% of deposits on bank deposits to determine income.

Estimated max purchase price based on 43% DTI, 20% down, $250 monthly debts, 1% property tax, $600 annual insurance, 8% rate for bank statement loan and 6.5% rate for conventional. Example purposes only.

With high home values, buying a home in New Jersey may require a much bigger loan than you can qualify for with a traditional loan. The best bank statement loans open new opportunities for self-employed buyers.

New Jersey bank statement loan requirements

• Self-employed for 2+ years
• Down payments as low as 10%
• No mortgage insurance
• Credit score of 620-660+
• Buy, refinance, or take cash out
• 12 or 24 months of bank statements
• Personal or business bank statements
• No tax returns or transcripts
• Up to 50% DTI
• Primary residence, second home, or investment property
• Combine W2 or 1099 income with bank statement income
• 1-4 unit homes and warrantable/non-warrantable condos
• Loan amounts up to $3-5 million
• As little as 3 months reserves

Who are good candidates for bank statement loans in New Jersey

With a strong economy, New Jersey is home to many types of self-employed workers and business owners. Following are perfect candidates for bank statement loans.

In short, almost anyone without a “regular job” could benefit.

What’s the bank statement loan process in New Jersey and how long does it take?

Not surprisingly, it can take less time to be approved for a bank statement loan than a traditional mortgage.

Standard mortgage lenders may have to sift through tax returns, constantly asking you for more schedules and paperwork. But bank statement lenders can verify your income in 24 hours in some cases.

1. Complete an application with the lender
2. Submit 12-24 months of bank statements
3. As quickly as 1-3 days, the lender will determine your income
4. This income determines your maximum home price or loan amount
5. Receive a pre-approval and start shopping for a home
6. Get an accepted offer on a home
7. Work with the lender to receive final approval and sign final paperwork
8. Close on the home purchase

In all, you can close a bank statement loan in under 30 days.

Popular New Jersey locations for bank statement loans

Bank statement loans are available statewide, but are particularly popular in these areas.

If you’re looking to finance a home in these cities, or any New Jersey city, consider a bank statement loan.

New Jersey bank statement loan mortgage rates

You’ll pay slightly higher mortgage rates for bank statement loans compared to the standard conventional loan. Rates tend to be around 2% higher than Fannie Mae and Freddie Mac rates. This can be expected since the lender is offering a low-doc approval.

Even at higher rates, you may qualify for much more using this loan type over a fully-documented loan.

Is it hard to find a bank statement lender in New Jersey?

There are many lenders that offer NJ bank statement loans. Some recognizable names are Angel Oak, NorthStar Funding, Griffin Funding, CrossCountry Mortgage, and more. 

The hardest part can be finding a lender with guidelines that match your criteria. We can match you with the perfect lender based on a few scenario questions. 

Bank statement loan alternatives in New Jersey

DSCR loans: A DSCR (Debt Service Coverage Ratio) loan can help you finance an investment property without tax returns. These loans look at the property’s cash flow. If the income is greater than the full payment, it might be approved for a DSCR loan.

Asset Depletion: Rather than income, the lender uses a large cash sum as basis for approval. It assumes you can pay yourself each month from this sum. It calculates monthly income based on the amount and the number of months that the program requires – typically 120-360.

Stated Income: True stated income loans are hard to come by but some lenders might offer them. With these loans, the lender puts no income whatsoever on the application. These are also known as no-ratio loans.

1099 Loans: You can use the previous year’s 1099s to qualify. Many lenders request the current year’s bank statements and/or P&L to verify income for the current year.

P&L loans: Your CPA can work up a profit and loss (P&L) statement for the lender. A P&L is used in lieu of tax returns, since it shows similar income/expense information in a much simpler way.

Hard money loans: If you need short-term financing for a fix and flip or renovation, look into hard money loans. You can replace the loan with long-term financing when the property is restored. You may need tax returns for hard money, but these lenders are more forgiving of write-offs than the traditional lender.

New Jersey bank statement loan pros and cons

Bank statement loan pros and cons can help you determine whether these loans are right for you.

Pros

• Potentially qualify for a bigger loan
• More flexibility for lending exceptions
• Use 12 or 24 months of bank statement (but as little as 3 months)
• Max loan decided by lender, not Fannie Mae
• No mortgage insurance

Cons

• No zero-down options
• Interest rates are higher
• Fewer lenders offer them
• NSFs can derail the approval
• Can use only about half of your deposit average to qualify

New Jersey bank statement loan FAQ

See if you qualify for a bank statement loan in New Jersey

Self-employed buyers in New Jersey are learning about this alternative way of qualifying for a mortgage. Many are getting approved and buying the house they really want instead of the one they can qualify for with a traditional loan.