Bank Statement Loans in New Hampshire

Who offers bank statement loans in New Hampshire?

Tom MacDonald, a loan officer with Elite Mortgage Group (a mortgage broker in Milford, NH), arranges bank statement loans for self-employed borrowers in New Hampshire through the lenders Elite works with. As a broker, Elite compares options from 45 lenders, so Tom can match the loan to the property and your plans. Each lender sets its own terms.

What is a bank statement loan?

A bank statement loan uses your personal or business bank statements, often covering 12 or 24 months, to estimate your income instead of your tax returns. It's built for business owners, 1099 contractors and others whose write-offs lower the income a traditional loan can count.

Most bank statement loans are not Qualified Mortgages, the CFPB's category for loans with standard, lower-risk features. The lender still has to make a good-faith determination that you can repay the loan, and under the CFPB's ability-to-repay rule it considers and documents your income, assets, employment, credit history and monthly expenses.

How do lenders figure your income?

Each lender sets its own method. In general, the lender reviews your deposits, sets aside transfers between your own accounts and one-time deposits, and, for business statements, accounts for business expenses, sometimes with a profit and loss statement from your accountant. Large or unusual deposits may need an explanation.

What are the trade-offs?

Terms, pricing and cash-to-close requirements vary by lender and often differ from conventional loans, and some lenders ask for more cash in reserve. It's worth comparing a bank statement loan with a traditional loan based on your tax returns, since the traditional route may fit if your returns show enough income. Tom can run both.

When does a bank statement loan fit?

• May fit: your business is steady, deposits are regular, and your tax returns show less income than you actually bring in because of write-offs.
• May fit: you're a 1099 contractor or business owner who doesn't want to wait for this year's return.
• May not fit: your returns already show enough income, since a traditional loan is often simpler to compare.
• May not fit: your deposits swing widely or mix personal and business money in ways that are hard to document.

What should I ask a lender?

• How many months of statements do you use, and personal or business?
• How do you treat business expenses: a set expense factor, a profit and loss statement, or both?
• How much cash do you want in reserve after closing?
• Is there a prepayment penalty?

Tom asks these across several lenders for you, so you can compare the answers side by side.

What should I gather?

• Personal or business bank statements, all pages, for the period the lender asks for
• Proof your business is active, such as a business license or a letter from your CPA
• Photo ID and statements for the accounts you'll use for closing
• Your recent tax returns, so Tom can compare a traditional loan too

The document checklist builds a list for your situation.

Talk with your CPA too

Tom isn't a tax advisor. Your CPA can tell you how write-offs and the timing of income fit your plans, and Tom can show what each choice could mean for your loan. See self-employed options for more.