Buying Your First Home Without a W-2

Tammy Emineth
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Buying your first home is a significant milestone, representing not just a place to live but also a long-term investment and a symbol of financial stability. For most people, the journey to homeownership can be daunting, especially for first-time buyers. Qualifying to buy your first home requires careful planning, financial discipline, and a clear understanding of the process.

If you are not a traditional employee with a W-2, you may be wondering if homeownership is an option for you. Most quick searches online for what you need in order to qualify for a mortgage will include things like tax returns, employment verification, pay stubs, or other documentation that doesn't apply to everyone.

Leron Grossman of Ardmore Real Estate says, "Even if you have excellent income, credit, and overall financial stability, you may not be able to qualify for a traditional mortgage without a W-2 income. However, that doesn't mean you can't become a homeowner!"

You need a lender with experience in creative financing solutions, like bank statement mortgages.

What is a bank statement mortgage?

A bank statement mortgage, also called a stated income loan, is a mortgage that is approved based on your bank statements rather than your income and tax returns.

Many people, perhaps like you, have a tax return that does not sufficiently reflect their actual income. Thanks to tax benefits, investments, and other unique scenarios, you may be able to comfortably afford a mortgage but not have the tax returns to prove it.

A bank statement loan bypasses this step and looks directly at your bank statements instead.

What do I need to qualify for a bank statement mortgage?

The requirements to qualify for a bank statement loan are different from conventional mortgages. We look at:

  • 12 months of personal bank statements


  • 24 months of professional bank statements

to determine average monthly deposits.

We also look for:

  • 680 minimum credit score
  • up to 90% LTV (loan to value), which means as low as 10% down payment
  • DTI limit of 43%

Can I use gift funds for a bank statement mortgage?

Yes! If you have gift funds you would like to use toward your down payment or closing costs on a bank statement mortgage, you are welcome to.

How are bank statement mortgages more flexible?

A bank statement mortgage is great for a variety of people. They offer flexibility because they can be used for owner occupied residences, second homes, investment properties, and even commercial properties. You can apply for a bank statement mortgage for a duplex to become a real estate investor and homeowners at the same time.

They are also ideal for anyone who wants to close fast, as we can often complete escrow in 3 weeks or less. If you are hoping to put in a competitive offer in a hot real estate market, having a bank statement mortgage that will close quickly might be enough of an edge to lead a seller to choose you over another comparable offer.

What are the rates and terms on a bank statement mortgage?

While each scenario will be unique, you can expect comparable rates and terms to a conventional mortgage. We have interest only options, as well as 15 or 30 year terms and 5/1, 7/1, or 10/1 ARMs available.

Ready to learn more about applying for a mortgage as a self-employed borrower? Contact a reputable lender in your area.

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I am a former real estate agent turned content marketer. I love to write about real estate, blog about home improvement and optimize real estate and other business websites for our customers. SEO Tips, real estate advice and more.

Frenchtown, MT

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