“Bank Statement Loans are NOT for Everyone”

“Bank Statement Loans are NOT for Everyone”

 

 

I did two of them this week and it was the perfect loan for both clients. In both situations they are self-employed and bank statements compared to tax returns are just a different world.

 

In the first case it is a Massachusetts mortgage. The bank statements show monthly deposits of over $19,000, but the tax returns show $46,000 in income and a $296,000 mortgage was needed. This lender isn’t stupid and is willing to do this loan but at a higher interest rate. The payment will be $500 per month higher, but compared to having to pay an additional $25,000 in additional income tax this option was much better for the client.

 

In the second case it is a Florida mortgage. The bank statements showed $8600 per month and the tax returns show a loss for the last two years because of all the real estate holdings. These folks were buying a $355,000 home and putting $110,000 down. Their payment ended up being $435 per month more than a regular conventional loan, but that difference was meaningless compared to the way the tax returns were. In both of these cases that additional $5,000 to $6,000 per year in mortgage payments was a miner expense compared to the taxes they would have had to pay.

 

“Who else do you know that needs my help?”

 

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

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www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 21 commentsJoe Petrowsky • November 10 2015 06:20AM

Comments

Good Saturday morning Joe. Interesting. Like it has often been said, it is all about the money - LOL

Posted by TeamCHI - Complete Home Inspections, Inc., Home Inspectons - Nashville, TN area - 615.661.029 (Complete Home Inspections, Inc.) almost 5 years ago

I didn't know that this was possible -It is always important to know that there are lenders like you around. 

Posted by Lise Howe, Assoc. Broker in DC, MD, VA and attorney in DC (Keller Williams Capital Properties) almost 5 years ago

Interesting cases, Joe.  Nice to see that there are options for those not showing big incomes on their taxes.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 5 years ago

Yes, this is why it pays to look at the big picture including tax benefits.

Posted by Women of Westchester Working Together, Women helping Women get ahead (Women of Westchester Working Together) almost 5 years ago

Oh, and I also didn't know it was possible to look at bank statements.  And, BTW, what's a "miner expense?"

Posted by Women of Westchester Working Together, Women helping Women get ahead (Women of Westchester Working Together) almost 5 years ago

Good morning Joe. They had the income but reported it in such a way to avoid taxes. You provided a method to get the loan and the cost was worth it! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) almost 5 years ago

Self employed folks with more "creatiuve accounting"? demand more "creatiuve mortgages."

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) almost 5 years ago

Good morning Joe.  Creative thinking and having a loan officer they can work with means saving money.  

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) almost 5 years ago

Joe, that is amazing that the IRS has not audited yet I say!!  Good for you.

Posted by Ginny Gorman, Homes for Sale in Southern RI and beyond (RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate) almost 5 years ago

I always learn something new from your post. Thank you for sharing.

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) almost 5 years ago

Good morning Joe. We used to call these  "liars loans" years ago. I didn't know they were still available.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) almost 5 years ago

Joe Petrowsky Of course the self-employed gets screwed every way they can. If these people are an acceptable risk, they should get the same rate as a salaried worker. Why not? It's analogous to an LOE.

Bill Roberts

Posted by Bill Roberts, "Baby Boomer" Retirement Planner (Brooks and Dunphy Real Estate) almost 5 years ago

Hi Joe.  You solve mortgage issues with the ease of a Michael Jordan dunking the basketball.

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) almost 5 years ago

Joe - there are so many  business owner with different scenarios and not everyone finds a solution.  Kudos to you.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) almost 5 years ago

Hi Joe... this is a new concept for me, Joe, so thank you for bringing it to our attention. That's what I love about AR--something new to learn each day!

Posted by Nina Hollander, Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor (Coldwell Banker Realty) almost 5 years ago

Joe,

A lot of jumbo loans are done that way too.  It is good that you illustrated how that works.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) almost 5 years ago

I always learn something from your blogs Joe. A very useful and interesting situation of looking at the big picture.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) almost 5 years ago

Joe this was a good example of why these loans exist.  However, there will be those who will abuse these loans and ruin it for Borrowers like yours who these loan programs were created for, just like what happened to Stated Income Loans.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 5 years ago

Joe, as I've said before... wish I could clone you!

Posted by Rebecca Gaujot, Realtor®, Lewisburg WV, the go to agent for all real estate almost 5 years ago

Yes Joe Petrowsky, every mortgage is unique and has to take into consideration the individual's financial situation.   That's why buyers need a PROFESSIONAL  mortgage lender like either of us. 

Posted by DEANNA C. SMITH CERTIFIED MOBILE NOTARY, Highest Ranked Certified Mobile Notary in Virginia (Certified Mobile Notary Signing Agent) almost 5 years ago

You should blog more about bank statement loans. These are products that can help many self employed people.

Posted by Roy Kelley (Realty Group Referrals) almost 5 years ago

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