Navigating the mortgage process can be a challenge if you’re self-employed, work part-time or have erratic income for other reasons. Lenders recognize that not everyone has a traditional 9-5 job. Here’s everything you need to know about mortgage lenders that do not require tax returns from mortgage preapproval to to what potential homebuyers are looking for, the mortgage approval process and various homeownership goals.
It’s best to contact multiple lenders since they have different requirements. Here are the best mortgage companies with no tax return mortgages. You can use a mortgage calculator to determine how much how you can afford, look into the loan terms you prefer, plan for closing costs, etc. But, you must also choose the best mortgage lender from the list below.
CrossCountry Mortgage earned Benzinga’s top spot due to its stellar customer reviews. Customers praise its fast, efficient closing process and its excellent communication.
CrossCountry Mortgage can work with borrowers with credit scores as low as 580. Its bank statement mortgage allows you to qualify with personal or business accounts. They can lend up to $6 million to those who qualify for the program. CrossCountry Mortgage also offers FHA loans and condo loans.
CrossCountry Mortgage is licensed to lend in California, Colorado, Connecticut, DC, Florida, Georgia, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, and Washington.
Why We Love It: CrossCountry Mortgage stands out from the competition by offering a diverse range of mortgage options. With a minimum credit score of 620 for conventional loans, 660 for jumbo loans, and a remarkably low 500 for FHA loans, homeownership is more accessible for first time homebuyers. Additionally, CrossCountry Mortgage demonstrates its commitment to supporting first time homebuyers by providing $4,000 in down payment assistance.
New American Funding is a good choice for self-employed borrowers. It allows you to use bank statements to verify your income instead of trying to qualify with tax returns, W-2s or pay stubs, which you might not have with a fluctuating or lump-sum income.
New American Funding is also an excellent lender for first-time home buyers. You can opt for an FHA, USDA or VA loan. New American Funding also has educational resources to help first-timers understand the mortgage process.
New American Funding follows a standard closing process, meaning the time to close will depend on the client and loan type. You can choose to start with a prequalification or preapproval. Prequalification doesn’t involve verifying your income. Preapproval means underwriters have reviewed your income and assets and are reasonably confident you will qualify for a home loan.
Why We Love It: New American Funding accepts credit scores as low as 580. The company offers flexible loan options, allowing you to choose the most suitable arrangement for your financial circumstances. One of the most attractive features is its low down payment requirement, which can be as little as 3% of the property's value.
Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio Non-QM mortgage loans. The mortgage company is licensed in 45 states and offers competitive rates and quick closing times.
Angel Oak Mortgage Solutions offers a wide range of mortgage solutions for various needs. Whether you are looking to purchase a home, cash-out on your current property, or refinance at a different rate, they have options for you.
With loan amounts available up to $3.5 million, they can support you in financing properties of different values. They cater to primary residences, second homes, and investment properties, and accommodate various types of properties such as single-family homes, townhomes, and condos.
As an added convenience, they offer options for self-employed borrowers and real estate investors who may not have tax returns readily available. They also provide opportunities for those with 1099 income and offer government loan products like FHA, USDA, and VA loans.
With competitive rates on conventional purchase and refinance, Angel Oak Mortgage Solutions ensures that you have options to suit your financial goals.
Why We Love It: Angel Oak Mortgage Solutions offers many non-traditional loans. It provides relatively shorter seasoning requirements, which can greatly benefit you if you have undergone bankruptcies or experienced negative credit events.
Caliber Home Loans’ bank statement product allows cash-out refinancing. If you’ve had your home long enough to build up equity, a cash-out refinance can help fund home improvements or consolidate debt.
You do need a credit score of 700 or higher and a debt-to-income ratio of 35% or less. Caliber has several other portfolio products, including options for borrowers with a foreclosure or bankruptcy in their history. It also offers conventional and government-backed mortgages.
Why We Love It: Caliber Home Loans offers a wide range of diverse loan programs. Whether you're a first-time homebuyer or a seasoned investor, Caliber has the right loan option for you. But it's not just about the loan programs; Caliber also prides itself on providing top-notch customer service. And with its fast loan processing capabilities, you can trust that your loan will be processed efficiently and without unnecessary delays.
Greenbox Loans has several non-traditional loan programs. It has 12-month and 24-month bank statement programs. Depending on your credit score, you may be able to make a down payment as low as 10%. It has programs for those with a history of bankruptcy or foreclosures.
It also has programs for investors. Greenbox also has traditional loan options like conventional and FHA loans. You can apply online and it publishes its rates on its website for easy comparison shopping.
Why We Love It: Greenbox Loans offers competitive interest rates and favorable loan terms. Its flexible eligibility criteria make it easier for a wide range of clients to qualify, regardless of their financial situation. What sets Greenbox Loans apart is its quick and easy online application process, allowing borrowers to apply seamlessly from the comfort of their own homes.
Union Home Mortgage is committed to providing outstanding service, which makes it one of the best companies for first time homebuyers. It has been named a top place to work multiple times.
Union Home’s bank statement mortgage allows credit scores as low as 660 and loans up to $1 million. It also offers conventional mortgages, FHA loans, VA loans and USDA loans.
Why We Love It: Union Home Mortgage has an innovative approach and commitment to providing flexible lending solutions. With its specialized products, self-employed individuals can qualify for a mortgage without having to provide tax returns, instead using alternative documentation to verify income.
Lenders may be able to help you determine whether a no tax return mortgage is right for you. If your taxable income is significantly lower than your gross annual income, a bank statement mortgage might help. It might help if your income is seasonal or erratic. If you don’t deduct a lot of business expenses, you might want to explore all your options. Self-employed borrowers can qualify for traditional mortgages, but it can be more of a challenge. Talk to lenders and be upfront about your needs. If one lender isn’t promising, contact another one.
Be persistent and read your loan offers carefully. Ask questions about anything that isn’t clear. When you’re ready, sign the paperwork and get the keys to your new home.
Many mortgages are qualified mortgages. This means these mortgages have a limit on points and fees and legal protections for the lenders. Lenders are required to follow the rules set by the Consumer Financial Protection Bureau (CFPB) when they offer borrowers qualified mortgages. One of these rules is that they must verify income, and they use tax returns to do that.
Tax returns may not reflect a self-employed person’s actual income. This is because self-employed borrowers usually deduct business expenses. This lowers their tax burden and makes their income look lower than it is. Lenders recognize that tax returns may not be the best way to measure borrowers’ income. They offer nonqualified mortgages to help address this issue.
Lenders still want to make sure borrowers can repay their mortgages. They use bank statements to verify income instead of tax returns with these types of mortgages. That’s why some lenders call these bank statement mortgage loans, making your homebuying process a little simpler. If you’re not sure what would work best for you, ask the financial institution of your choice for an affordability calculator that will precede your loan application.
The mortgage process for a bank statement mortgage is similar to the process of a traditional home loan. Here’s how the process works and the steps you should take to get prepared to purchase or refinance a home.
Although it isn’t required, checking your credit is a good first step toward buying a home. This is especially true if you’re getting a bank statement mortgage. Some lenders will require you to have a good credit score to approve you for a bank statement mortgage. You might even need to improve your credit prior to applying, especially if your broker has run some predictors and wants to get you approved faster. Credit scores range from 300 to 850. Lenders consider a score of 700 or higher to be good — though it can vary. Get a free copy of your credit report by visiting AnnualCreditReport.com. Review your report for any errors or accounts that don’t belong to you. Contact the credit bureau involved and let that particular bureau know of any errors or issues you find.
This is the most significant difference between a traditional mortgage and a bank statement mortgage. For a traditional mortgage, you typically need to provide your 2 most recent bank statements. For a bank statement mortgage, you will need to provide at least 6 months of personal and business bank statements. You may need to provide 12 months of statements or more. Gather any documentation of any other income you receive as well.
Contact multiple lenders for a quote. Let the lenders know that you’re interested in a bank statement loan. Review each quote carefully. Look at the interest rate and fees. Choose a lender and let the lender know you’d like to be preapproved. Provide your lender with any documentation it needs to complete the preapproval process. The lender will provide you with a letter stating you’re preapproved.
Look for a home that meets your needs and your budget. Keep in mind that you can get a mortgage for less than your preapproval amount. If a lender preapproves you for $200,000, you can buy a home for $150,000 if that’s a better fit for your budget. Once you find a home that checks all your boxes, put in a bid. If the seller accepts your bid, it’s time to finalize your application.
Choose a lender to complete your formal application. You do not have to choose the lender who preapproved you. Provide all the documentation the lender requests. The lender may ask for additional information, which is a normal part of the process. Answer the lender’s questions promptly. The lender will let you know whether it has officially approved you for a mortgage. If you’re approved, you’ll sign your paperwork and pay your down payment at a meeting. Lenders and real estate agents refer to this meeting as your closing.
You may need to provide a higher down payment for a bank statement mortgage. You may also have a higher interest rate. Each lender has its own requirements, which is why it’s essential to get multiple quotes. Remember, many lenders may not offer this support for things like jumbo loans, and options for homebuyers change based on where you check.
Not all lenders offer bank statement mortgages. Each lender that does has its own minimum credit score. Here are several lenders that don’t require tax returns.
| Lender | Minimum Credit Score |
|---|---|
| Luxury Mortgage | 580 |
| New American Funding | 620 |
| Greenbox Loans | 580 |
| American Financing | 620 |
| Guild Mortgage | 660 |
| Union Home Mortgage | 580 |
| Griffin Funding | 620 |
Mortgage rates vary based on your credit score, where you buy your home and the type of mortgage you choose. You will find many types of bank statement mortgages when you start your rate shopping. A fixed-rate mortgage has the same interest rate for as long as you have the mortgage. An adjustable-rate mortgage (ARM) has a rate that can change. ARMs usually start with a fixed rate. The rate changes after that. A 5/1 ARM has a fixed interest rate for the first 5 years.
Here are the current mortgage rates for a few common types of mortgages. Yes, these rates impact your monthly mortgage payments, but they also impact options for homebuyers that include loans terms like a 15-year or 30-year mortgage, using fixed-rate or adjustable-rate mortgages, whether you need private mortgage insurance and more.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 5.79% | 5.861% |
| 15-year fixed | 5.138% | 5.254% |
| 7/1 ARM (adjustable rate) | 6.104% | 7.177% |
| 5/1 ARM (adjustable rate) | 6.513% | 7.627% |
Choosing the best mortgage lender that does not require tax returns is possible if you face challenges with traditional income documentation. It requires thorough research, considering factors such as loan terms, interest rates, reputation, and alternative income verification options. By partnering with a lender that understands and specializes in these unique circumstances, you can achieve your homeownership goals and secure a mortgage loan that suits their financial needs.