While the gig economy has been around for a while, since COVID hit it has completely exploded. In 2020, the gig economy grew by 33%, growing 8.25 times faster than the US economy as a whole. In the same year, 2 million Americans tried “gig work” for the first time, and 34% of American workers are now involved in the gig economy. And that number is growing, with the value of total transactions expected to grow from $204 billion to $455 billion in 2023.
More and more people are relying on Uber, Lyft, Etsy, home-based businesses, Upwork, and even social media for full-time income. Compared to a 9-5 job, working as a freelancer, gig worker, or independent contractor not only offers flexibility, but unlimited earning potential. But these self-employed people may face challenges when trying to qualify for mortgages. The reason? The industry’s mostly automated underwriting processes are for borrowers with regular paychecks who receive annual W-2 statements. Most mortgage lenders impose stricter rules on self-employed borrowers than on those who work for someone else.
Bank statement loans have taken over from the non-traditional stated income loans of the past as a new alternative for borrowers who are unable to verify their income the traditional way by providing tax returns for the previous two years, W2 forms and pay stubs. These are non-QM loans, non-traditional loans, or loans with expanded criteria that allow other forms of documentation to prove repayment capacity.
Bank statement loans for social media influencer income? That’s right! Just as it sounds, a bank statement loan allows the borrower to verify their income with as little as 12 months of bank statements. Griffin Funding Bayside does not exclude income from job titles such as online creators, social media influencers, YouTubers, podcast hosts, MLM distributors, etc.
Historically, bank statement loans have been popular with the following types of borrowers: business owners, Freeland employees, consultants, contract workers, independent contractors, sole proprietors, contractors, real estate agents, and retirees. Since the increase in the number of people seeking independence via a global pandemic, the sub-categories of “self-employed” have grown considerably.
If you don’t have income or traditional tax filings, that doesn’t mean it should be difficult to get home financing. You don’t have to submit any tax returns or financial statements other than your bank statements to buy a new home or to refinance an existing home you already own. This allows self-employed borrowers easy access to home loans, without the challenge of their taxes not reflecting their full income.
After providing as little as 12 months of bank statements, Griffin Funding Bayside will be able to determine how much you can afford to borrow. Then we verify your bank statements by calling your bank or by completing a deposit verification request and mailing or faxing it to your bank. If you use your business bank statements to qualify, we will still need to see the expenses you incur as a result of owning a business. However, we will not penalize you for expenses that you have deducted from your tax returns.
In addition to being able to qualify for a non-traditional mortgage in general, a bank statement loan has many other advantages. You can get a bank statement loan for as little as 10% depending on other factors such as credit, etc. You can borrow up to $5 million or take out a refinance loan of up to 85% of the value of your property. . There are fixed or adjustable rate options, and you may even have the option of an interest-only mortgage.
When it comes to getting a bank statement loan, the biggest hurdle is finding the right lender to work with. Our team at Griffin Funding Bayside specializes in bank statement loans for the self-employed, gig workers, or 1099 income workers. If you have questions about this type of loan program or to find out if you qualify , contact us today! 619-393-8458