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Angel Oak Bank Statement Loan

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Financing for Self-Employed Workers

Verify income for your mortgage loan with bank statements instead of tax returns.

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Best For

Self-employed borrowers looking to secure a mortgage loan.

Financing Options

Available for purchase and cash-out or rate-term refinance.

Property Types

Primary, second home, or investment properties.

Bank Statement Submissions

Provide 12 or 24 months of business or personal bank statements.

Alternative Financing

Use 1099 income instead.

Condo Policy

Non-warrantable condos allowed.

Self-employed workers have a more difficult time qualifying for a mortgage. Conventional lenders use taxable income on returns to determine if a borrower should qualify for a loan. However, gig workers and small business owners report less taxable income than they earn since write-offs and other strategies help self-employed workers minimize taxes. While these strategies save money, they make your loan application less appealing to a conventional lender. Angel Oak’s bank statement loan addresses this issue. This financing option provides a more straightforward path for self-employed workers seeking funds to purchase a property.

About Angel Oak

Angel Oak Mortgage Solutions LLC NMLS is one of the best mortgage lenders due to the company’s versatility. The full-service lender provides conforming and Non-QM programs to help consumers access funds for a mortgage. Angel Oak thrives on innovation and has provided loans to borrowers since 2010. Angel Oak provides more flexibility than Fannie Mae and Freddie Mac loans. Some borrowers get accepted for an Angel Oak loan even if they get denied a conventional loan.

The mortgage lender offers traditional and non-traditional (non-QM) mortgages. Their website has an interactive map that shows where you can find one of their 200+ loan officers. The company employs 900 people in total. Angel Oak has these loan officers spread across 39 states where the company received licenses to operate (M.D., LA, MS, AL, and others). The mortgage provider has lent over $25 billion in mortgage loans and has $19 billion in assets under management. Angel Oak was recently recognized as one of the fastest-growing private companies in Atlanta.

What Is a Bank Statement Loan?

A bank statement loan lets consumers qualify for a mortgage through their bank statements. You won’t have to provide W-2 documents or tax returns to obtain a loan. Removing these requirements makes it easier for business owners and independent contractors to obtain loans. Eligible self-employed borrowers can use this loan to purchase or refinance a home.

How Does a Bank Statement Loan Work?

A lender reviews your personal or business bank statements for the past 1-2 years. The lender will use these statements to calculate your income for qualification purposes. Bank statement loans work well for self-employed workers who use tax strategies to reduce their taxable income. Conventional lenders will look at the reduced taxable income and possibly reject your application or assign a higher interest rate. Bank statements help prevent that scenario from happening to gig workers and business owners. You can also use liquid assets, such as stocks, mutual funds, and 401k plans to get a bank statement loan.

You may have to make a larger down payment to get this financing, but a bank statement loan can help you get more capital for your mortgage. You could still end up with a respectable 10% down payment. It’s not as low as the 3% minimum down payment for conventional mortgages, but a 10% down payment is more reasonable than the 20%-30% down payment requirement for other loans. A good credit score will help you get better financing, and the minimum requirement depends on the lender.

Benefits of Bank Statement Loans

Bank statement loan programs have several qualities that make them more attractive than other financial products. Here are some of the key perks.

  • Use personal bank statements instead of tax returns: Some tax returns showed losses even when the business owner made a profit. Business owners can offset gains to save money, but they get hurt when applying for a conventional loan. Bank statements give lenders a more accurate perspective of your income. Self-employed borrowers may get approved and get lower interest rates on these loans.
  • Continue using write-offs without fear: You won’t have to worry about how writing off some of your taxes can affect your mortgage application. You deserve to save on taxes without getting penalized by mortgage brokers. A bank statement loan fixes this problem.
  • Some lenders let you make low down payments: You might qualify for a 10% down payment on the loan depending on your credit score, income, and other factors.
  • Higher debt-to-income ratio maximum: Every bank statement mortgage lender will look at your monthly income to determine if you can afford a loan. This research helps a lender assess the risk with each borrower before providing financing. Bank statement lenders give borrowers more flexibility with the debt-to-income (DTI) ratio. You can get a loan even if you have a 50% DTI ratio, but conventional mortgages from Fannie Mae and Freddie Mac are less accommodating.
  • More coverage: You can use a bank statement loan for a primary residence, vacation home, or investment property. FHA loans are only for primary residences, and conventional mortgages also have limits. You can borrow more money with a bank statement loan. You can borrow up to $3 million through the Angel Oak Bank Statement Program. Conventional mortgages have limits depending on your location. The 2023 limit for most locations is $726,200. While the conforming limit for high-cost areas is $1,089,300 in 2023, it’s still less than what you can get with a bank statement loan.

Bank Statement Loan vs. Traditional Mortgage Loan

A bank statement loan focuses on your bank account statements (personal or business). A traditional mortgage loan lender uses your tax forms, W-2s, and paycheck stubs to decide on your loan application. However, traditional loans hurt self-employed consumers since these consumers have more flexibility with tax write-offs. In addition, a lower taxable income makes them less appealing to lenders and can result in less favorable loan terms and conditions.

Some bank statement loan providers don’t tack PMI onto the loan. It’s possible to make a 10% down payment toward a bank statement loan without incurring insurance premiums. Borrowers must pay PMI on conventional loans if the down payment doesn’t exceed 20%. You can get rid of PMI once you build up 20% equity in your home, but why pay PMI if you don’t have to in the first place? It gets even worse for FHA loans. If you use an FHA loan to finance your home, it can take at least 11 years to remove the PMI costs. While FHA loans make it easier to get a home, even if you have a 500 credit score, you can expect to pay more over the loan’s duration. Some FHA financing requires PMI expenses for the loan’s lifetime. The only way out is through a refinance, where you turn your FHA loan into a conventional mortgage or similar financial product.

Is A Bank Statement Loan Right for You?

A bank statement loan is optimal for self-employed workers who capitalize on several tax deductions. Higher earnings help consumers qualify for better loans. However, a bank statement loan isn’t the best choice for everyone. Self-employed borrowers with several overdraft payments should consider another loan product. Lenders won’t like to see these fees in your history. A bank account with a positive balance for several months is more appealing to a lender. The positive balance indicates the borrower can reliably pay back the loan.

Lenders will also check for regular deposits. Making consistent deposits tells the lender that you generate steady income. Frequent deposits will make a borrower seem less risky to a lender. However, if you haven’t deposited money into your account for several months, the lender may become concerned. A bank statement loan is one way to qualify for financing. Self-employed borrowers should consider several financing products before opting for a bank statement loan.

Requirements to Get a Bank Statement Loan with Angel Oak

  • At least a 10% down payment
  • Two years seasoning for foreclosure, short sale, bankruptcy, and deed-in-lieu
  • Owned-occupied homes, second homes, or non-owner-occupied properties

How To Inquire About an Angel Oak Bank Statement Loan

Angel Oak offers financing solutions to millions of clients. You can inquire about their bank statement loan option by filling out the form. After providing your details, one of Angel Oak’s licensed mortgage originators will contact you within one business day to provide expert advice. An originator will provide you with additional information about how to qualify and inform you about the necessary documents. Angel Oak Mortgage Solutions may require additional documents for eligibility.

You can learn more about Angel Oak’s Bank Statement Loan and their other home loan financing options through their website.

Other Options from Angel Oak

Angel Oak has numerous financial products for self-employed and employed individuals. Their flexibility helps more people obtain funds.

  • 1099 Income Loan: Borrowers can use 1099 forms instead of tax forms to qualify for a loan. This financing option helps self-employed borrowers get funds.
  • Investor Cash Flow Loan: Angel Oak doesn’t check your personal income. The mortgage lender will assess a property’s cash flow when giving out proceeds.
  • Jumbo Loan: This loan helps borrowers obtain financing for expensive properties that exceed the limits of conventional loans.
  • Asset Qualifier Home Loan: Consumers can use checking, savings, retirement, and brokerage portfolio accounts to qualify for a loan. You can also use other assets, and Angel Oak will not check your income or tax returns.
  • Foreign National Program: Borrowers outside the U.S. can use this program to receive a loan. Angel Oak will assess a property’s cash flow instead of the borrower’s income.
  • Traditional Home Loans: Angel Oak also offers conventional FHA, USDA, and V.A. loans.

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