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Bank Statement Mortgage Loan Program in Florida


Are you struggling to acquire a mortgage for a new home in Miami,Tampa, Orlando, St. Petersburg, Fort Lauderdale or Hollywood because of the tax returns?  Try a bank statement mortgage in Florida. It’s only requires bank statements and not your tax returns.

The Sunshine State, Florida, became a part of the Union in 1845 as the 27th state. Low cost of living and major industries like construction, banking, healthcare, defense, aerospace and tourism make Florida one of the most popular states of the U.S. Florida borders both the Gulf of Mexico and Atlantic Ocean. There are several recreational attractions in Florida including Cape Canaveral, Disney World, Florida Keys, the Everglades and South Beach.

The coastal areas of Florida gained tremendous traction last year and many people looked towards buying their new home in Florida’s coastal areas. The prices of homes in Florida are not as high as some of the other states of the U.S., but it is expected that home values in the state will increase later this year. Currently, the median home value in the Sunshine State is $220,600. The median price of listed homes in the state is $288,000 while the median sales price is $213,400.

Bank Statement Mortgage

In Florida, many self-employed borrowers find it hard to acquire a mortgage for a new home. The reason is that the tax returns of business owners and those people who receive a 1099 don’t show their actual income. They write off several expenses that are there on the tax returns of W2 or salaried employee. Therefore, the income on their tax returns is not sufficient to qualify them for a conventional mortgage. Does this mean that self-employed borrowers can never get a mortgage for a new home in Florida? No! An alternative solution is the bank statement mortgage that certain lenders offer to self-employed borrowers to help them qualify for a home loan without tax returns. There are four options available for the bank statement loan program.

12 Month Loan Program

If you wish to use a 12 month bank statement program, you will have to provide your most recent personal bank statement of the last 12 months that show deposits from work.

24 Month Loan Program

In the 24 month loan program, you will be required to provide bank statements of the last 24 months. The bank statements can be personal or business. The 24 month business bank statement program generally uses 50% of deposits as qualfiying income. For example, if a borrower made $10,000 of deposits in one month, $5,000 would be used as the qualifying income. Borrowers who wish to qualify more than 50% can sometimes prepare a P&L to obtain a more favorable “expense factor”, or get a letter from their CPA.

Qualifying for the Bank Statement Mortgage in Florida

You can qualify for the bank statement loan program if you are a business owner or self-employed borrower. If there are two borrowers, then at least one of the two should be self-employed for the past two years to qualify for the bank statement loan program. Bank statement mortgage is an ideal solution for 1099 and commissioned borrowers as they don’t have to provide their tax returns or even sign on IRS 4506-T form. All you need to do is provide bank statement of consecutive 12 to 24 months to show your income.

Credit Score Required

In order to qualify for a bank statement mortgage in Florida, you need a middle FICO score of at least 620 for 15-20% down payment. If your credit score is over 660, you can put as little as 10% down. Better interest rates also generally happen at and above the 660-680 FICO threshold.

Monthly Reserves

For bank statement mortgage in Florida, you generally need at least three months of principal, interest, taxes, and insurance (PITI) reserves. If the amount of loan is more than $1 million, then six months of PITI is required. For amounts exceeding $2M, 12 months of PITI is needed.

Tradelines Required

Borrowers will generally need to show they have a few tradelines they have been paying on. Usually 2 tradelines (credit cards for example) over the last 24 months, or 3 tradelines over the last 12 months.

12 Months of Verifiable Rent or Mortgage

Borrowers will also be required to show they have verifiable rent or mortgage payments for the last 12 months. It becomes problematic when a borrower has been staying with family rent free and tries to obtain a bank statement mortgage in Florida. Borrowers will usually be required to show 12 months of cancelled rent checks.

The Advantage

No signing of 4506-T and no tax returns. The bank statement loan program will not reduce your income by tax reductions. In other words, if you make enough money, but your tax returns via deductions reduce your qualifying income, then these programs can be ideal for you, as you don’t need to show tax returns, nor do you need to be a W-2 employee.

Acceptable Properties

Bank statement mortgage in Florida is available for single family homes, condos, townhome, triple or four-plex, duplex and condotel. Usage of property can be as a rental, residence or second home property.

If you have been denied a home loan or have any questions about real estate or mortgage please contact the author, Matt Herbolich, MBA, JD, LLM by phone or text at 888-900-1020 or by email at Mr. Herbolich works when you work, so feel free to contact him any time.

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