NO Tax Return-Florida Cash-Out Refinance Mortgage lenders

NO TAX RETURN MORTGAGE LENDERS QUESTIONS AND ANSWERS

What is a Bank Statement Refinance Loan?

Bank Statement Refinance loans have taken over the traditional Bank Statement Refinance income loans as an alternative for self employed Florida mortgage applicants who are unable to verify their income by providing the previous two years tax returns, W2s and pay stubs. These loans are called non-QM loans, nontraditional loans or expanded criteria loans that allow other forms of documentation to prove the ability to repay. Just as it sounds, a Bank Statement Refinance loan allows the borrower to verify his or her income with Bank Statement Refinances

Eligible for a Bank Statement Refinance loan:

  • You must prove self-employment for a minimum 2 years.
  • Must provide proof of 12-month rental history or and 3-6 months future payments in reserves.
  • You must have at least 10% down.
  • You must have 4-6 months of PITI reserves
  • You may qualify with as little as a 12-months Bank Statement Refinance.
  • You must have a credit score of 600 or above to qualify.
  • The minimum loan amount is $100,000, and the maximum loan is $5,000,000.

What Documents Do I need for a Bank Statement Refinance only Mortgage?

  • Proof of income = Your most recent 12- or 24-months Bank Statement Refinances Business or Personal Bank Statement Refinances EVERY PAGE EVEN BLANKS in PDF labeled by month.
  • PDF proof of down payment statement= 2 Months Bank Statement Refinances to source funds..
  • Proof of 2 years in the same business or line of work = To include business licenses or satisfactory evidence of self-employed to cover previous 24 months that could include: Articles of incorporation, 2 years of 1099 s, Business license more than 2 years or accountant letter stating more than 2 years in the same business.
  • Obligations = Divorce decree, Child support or court order required payment statements. Only if applies.
  • ID = Driver’s license, SS Card.
  • Mortgage Statements = For rental properties including taxes and insurance statements. Only if applies.
  • W2 or 1099= If you have separate W2 or 1099 income you would like to use to qualify please provide.
  • Purchase and Sale Contact. Only if you have one.
  • Verified Timely Rent Payments- For Purchases Only – Please send front and backs of checks clearing your account or wire transfer’s for the most recent 12 months to verity timely rental payments.

What Are the Advantages of a Bank Statement Refinance Loan?

In summary, these are the advantages of a Bank Statement Refinance loan:

  • The lender can look at 12 or 24-month Bank Statement Refinances.
  • 30 Year Fixed Options.
  • Bank Statement Refinance only mortgage lenders do not need to look at your tax returns.
  • Your income statements are made up of the average monthly income deposits.
  • You can get a Bank Statement Refinance home loan for as little as 10 percent down.
  • You can do a cash-out refinance.
  • You can borrow up to $5 million.
  • Debt to income ratio up to 55 percent.

Eligibility Requirements for a Bank Statement Refinance Mortgage Loan?

Eligibility for a Bank Statement Refinance requires total deposits minus disallowed deposits. This amount is then divided by the number of Bank Statement Refinances, whether it is the 12 or 24 months statement.

Another option is that if the co-borrower is a W2 employee you can use a hybrid of W2 and tax return income from the co-borrower and Bank Statement Refinance income from the borrower or assets from the co-borrower and Bank Statement Refinances from the borrower. Non-QM loans can use multiples sources of blended incomes to qualify.

Deposits which are disallowed in regards to a Bank Statement Refinance loan include transfers between bank accounts and cash or large deposits, which can raise a level of concern and may require a letter of explanation.

Special Considerations By Bank Statement Refinance Mortgage Lenders

  • You can use either business or personal no commingling.
  • Use 12 months business bank account or personal account depending on the lender.
  • Deposits which are transferred from a business account into a personal account are OK.
  • You may combine W2 income with Bank Statement Refinance income as long as the income is not being counted twice.
  • Foreign Bank Statement Refinances and Foreign Assets may be considered and must be translated to English.

The Bank Statement Refinance Loan Application Process

To apply for a Bank Statement Refinance loan you would fill out our full mortgage application. Then provide your last 12 or 24  months’ worth of Bank Statement Refinances from a personal or business bank account. Bank Statement Refinance mortgage loans are processed through a manual underwriting process. This means the income is calculated by a person so the process can take 24 -48 hours.

How do I qualify For A Bank Statement Mortgage Refinance Loan?

  • You be Self Employed for at least 1 years.
  • No tax returns
  • Use up to 80% of Deposits for income!
  • Up to $3,000,000 Loan Amounts.
  • Minimum Loan Amount $100,000.
  • Purchase or Refinance cash out or rate and term.
  • Primary and second homes only.
  • No PMI mortgage insurance..
  • 30 Year Fixed or ARM Rates.
  • 12 or 24 Months Bank Statements Personal or Business OK
No Tax Return Florida Mortgage Refinance Lenders – General Requirements
No Tax return Florida mortgage lenders Cash Out refinance Rate Quoted is for a 30 year fixed or 5/1 ARM. No Tax return mortgage refinance based on Loan to value requested if available – if N/A, rate is based on Max LTV.

No Tax return Florida mortgage lenders Cash Out refinance Platinum and Portfolio Select Programs ONLY: Loan amounts greater than or equal to $1,500,000 or Loan amounts greater than or equal to $1,000,000 with an LTV greater than 80%; a No Tax return Florida mortgage loan applicants Cash Out refinance paid second appraisal must be obtained.

No Tax return Florida mortgage lenders Cash Out refinance Minimum loan amount for Non-Prime, Foreign National, Portfolio Select and Investor Cash Flow is $150,000. Minimum loan amount on Platinum is $150,000.

No Tax return Florida mortgage lenders Cash Out refinance Minimum loan amount for Bank Statement Refinance loans (Platinum, Portfolio Select only) is $150,000.

Florida Cash-out Mortgage Verification Required

• 12 months housing history required.
• Rental history evidenced by 12 months proof of payment via cancelled checks or bank debits.
• Rent free letters from spouses are not permitted. Housing history is required.

  • Note: This quote is based on the borrower meeting the Standard Trade line requirements. Need 3 tradelines reporting for a minimum of 12 months -OR- 2 trade lines reporting > 24 months; all with activity in the last 12 months. Cancelled checks for 12 or 24 months housing history may also be used as a tradeline. Exceptions allowed on NON PRIME program ONLY – If the borrower does not meet these tradeline requirements, reduce the max LTV by 5% (max LTV not to exceed 75%). Maximum of 1×30 last 12 months for Portfolio Select, 0x30 last 12, 1×30 last 24 months for Bank Statement Refinance, 0x30 last 24 months for Income Cash Flow & Foreign National loan programs. Additional program restrictions may also apply, contact your Account Executive for details.

BORROWERS MUST BE SELF-EMPLOYED TO QUALIFY FOR THIS PROGRAM.
DOCUMENT REQUIREMENTS
(1) 12 or 24 months Personal or 24 months Business Bank Statement Refinances
 Borrowers who own more than 3 businesses must use personal Bank Statement Refinances option
 Bank Statement Refinances must be most recent available at time of application and must be consecutive
(2) Profit & Loss Statement
 If submitting personal Bank Statement Refinances, a P&L prepared by the borrower covering no less than 12 or 24 months is required

(2) Profit & Loss Statement
 If submitting personal Bank Statement Refinances, a P&L prepared by the borrower covering no less than 12 or 24 months is required
 The P&L must be signed by the borrower
 If submitting business Bank Statement Refinances, a P&L prepared by the borrower covering no less than 24 months is required
 Borrower is required to provide separate P&Ls for each business being used in qualifying.
 The P&L should generally cover the same calendar months as the Bank Statement Refinances provided.
(3) Validation of a minimum of 2 years existence of the business from one of the following: Business License, Letter from Tax Preparer, Secretary of State Filing or
equivalent

Self Employed/Wage Earner Combination – Joint borrowers with 1 wage earner and 1 self-employed business owner can verify income separately, with the self-
employed borrower utilizing Bank Statement Refinances and the wage earner providing pay stubs/W-2s. The wage earner 4506T should include W-2 transcripts only.

Bank Statement Refinance MORTGAGE LENDERS PROFIT & LOSS ANALYSIS
• Net Income from the P&L will be used as Qualifying Income for both personal and business Bank Statement Refinances.
• The P&L used for qualifying must be signed by the borrower.
• Declining Income requires an LOE
• Any amounts on the P&L representing salary/wages paid to the borrower/business owner can be added back and considered in the net income analysis.
• Expense line items that can be added back to the business net income include depreciation, depletion, amortization, casualty losses, and other losses or
expenses that are not consistent and recurring.
• Borrowers utilizing business Bank Statement Refinances that own > 50% but < 100% of a business will be qualified at the P&L/AES net income multiplied by their ownership
percentage.
• The P&L expense ratio, Gross Income minus Net Income, divided by Gross Income, should be reasonable for the profession.
Example: A home-based sole practitioner therapist/consultant can be expected to have a low expense ratio, while a retail business that has a full staff of
employees and relies heavily on inventory to generate income will have a high expense ratio.
• If the file does not contain a CPA prepared P&L, steps must be taken by the underwriter to evaluate the reasonableness of the expenses listed by the borrower.
• This requires the borrower to provide a business narrative which includes detail related to the size/scope and operating profile of the business, including the
following: o Description of Business/Business Profile o Location & Associated Rent o Number of Employees / Contractors o Estimated Cost of Goods Sold (Does
business involve sale of goods or just services?) o Materials/Trucks/Equipment o Commercial or Retail client base? o Business Analysis
• Expenses listed on a borrower prepared P&L should generally relate to the information provided below.

CASH OUT Bank Statement Refinance MORTGAGE LENDERS ANALYSIS
• Eligible deposits from the Bank Statement Refinances should generally be within +/- 10% of the gross income (business accounts) or net income (personal accounts) as
shown on the P&L.
• Transfers from other bank accounts into the business bank accounts will require conclusive evidence that the source of transfer is business related income
• An Income calculated with Bank Statement Refinance documentation should be consistent with income documented by the borrower on the loan application
• Borrowers income on the 1003 should never be used for qualifying, even if it is less than the P&L income calculated above
• Any deposits into a personal account deemed to derive from a source other than the business (rents, SSI, joint account holder wage income, IRS refunds)
must be excluded from the analysis
• NSFs require a borrower LOE to evaluate that they are not due to financial mishandling and/or indicative of insufficient income
• NSFs should be covered with deposits shortly after they are incurred.
• Unusually large deposits exceeding 50% of monthly income (as defined by Fannie Mae) into personal accounts must be documented and explained via LOE,
and must be consistent with the business profile. If LOE is sufficient, no sourcing required.
• Transaction history printouts are not acceptable.
• Multiple bank accounts may be used.
• Co-mingling of personal and business receipts and expenses in Personal Bank Accounts is not permitted. Evidence of comingling will require the loan to be
submitted and qualified as a business Bank Statement Refinance loan.
• If personal Bank Statement Refinances provided reflect payments being made on obligations not listed on the credit report, a thorough analysis must be performed and
LOE provided from the borrower, as outlined below.
Bank Statement Refinance loans submitted with tax return documentation or transcripts are ineligible.
 Joint Accounts – A joint personal account with a non-borrowing spouse or domestic partner can be used for qualifying as follows: o If not contributing
income/deposits, it must be validated by a borrower affidavit o If contributing income/deposits, source must be clearly identified (direct deposit, SSI, trust
income) and amounts must be subtracted from the analysis o Relationship letter must be present in file
 Retirement, Government Annuity, and Pension Income – GB may recognize an ancillary income stream from employment-related assets as eligible for
income qualification. Borrower must evidence a 12 month history of documented draws or interest/dividend income. If, based on that history, the income will
continue for at least three years, the income may be used for loan qualification. One of the following types of income documentation is required: o Copy of
award letter or letters from the organizations providing the income o Most recent personal income tax return with all schedules o Most recent W2 or 1099 o
Most recent 2 months Bank Statement Refinances showing deposit of funds
If the income being used for qualifying represents at least 50% of the borrower’s total income, a five year continuance is required. The borrower must have
unrestricted access, and available to the borrower without penalty. Documentation of asset ownership must be in compliance with the allowable age of credit
documents.
 Restricted Stock Income – GB will only consider restricted stock that was awarded in prior 2 years and became unrestricted (vested) in the current year. The
Vesting Schedule must indicate the income will continue for a minimum of 3 years at a similar level to the prior 2 years. Continuance is based on the vesting
schedule using a stock price based on the 52 week low for the most recent 12 months reporting at the time of closing. A 2 year average of prior income
received from RSU’s or stock option will be used. The following documentation is required: o Copy of the vesting schedule o Most recent W2 and pay stub o
Private Stock not eligible.
 Component Sources of Income – A borrower who has a self-employed business and also receives income from other sources is eligible for the bank
statement program. Income sources include but are not limited to rental properties, trust & investment, alimony, etc. These income sources should be
separately documented on the 1003 and should be separately supported by Bank Statement Refinance deposits.
o Rental Income – months via cancelled checks, deposits clips, or bank records ed by a vacancy/expense factor of 25%
o Trust Income – , distribution frequency, and duration of payments
o Alimony Income –
deposit slips, or bank records
o Note Receivable Income opy of the note confirming amount and length of payment
checks, deposit slips, or bank records

 

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