Utah guide outlines bank statement mortgage options for self-employed borrowers

Steve Saxton of Christian Roberts Mortgage has released a guide showing how Utah self-employed borrowers may qualify for home loans using 12 months of business bank statements or 1099 income instead of relying only on tax returns. The examples highlight how lenders may underwrite higher current cash flow for borrowers whose taxable income does not match their business performance.

Why it matters: - Self-employed borrowers often have income patterns that do not fit traditional mortgage underwriting. - Bank statement and 1099 programs can help borrowers document current cash flow when tax returns understate earning power. - The guide is aimed at Utah buyers seeking jumbo mortgages and other complex-income loan options.

What happened: - Utah mortgage loan advisor Steve Saxton published a new guide for self-employed homebuyers. - The guide is titled “Bank Statement Loans for Self-Employed Borrowers in Utah: 4 Real-World Mortgage Examples.” - The guide uses four mortgage scenarios to show how borrowers may qualify with 12 months of business bank statements or 1099 income plus a spouse’s W-2 salary. - Saxton is a mortgage loan advisor with Christian Roberts Mortgage.

The details: - One example covers a self-employed couple running a roll-off dumpster company in the Park City area for about three years. - The lender reviewed 12 months of business bank statements and used a 50% business expense factor for equipment, vehicles and other operating costs. - That calculation supported a purchase price of about $5.5 million with 20% down. - A second example features an online business coach with more than $100,000 a month in business deposits. - Because the business was service-based and did not sell physical goods, the mortgage program used a 15% expense factor. - That borrower qualified for a home of about $2.6 million with 25% down. - A third example involves a home-based financial planner with low overhead and rising cash flow. - Using 12 months of business bank statements and a 15% expense factor, that borrower qualified for an $850,000 home with 20% down. - The fourth example features a 1099 contractor whose eligible income was paired with a spouse’s W-2 salary. - The mortgage program applied a 10% expense factor to the contractor’s 1099 income. - The combined income supported a home purchase of about $2.2 million with 20% down. - The guide says bank statement loans may review 12 or 24 months of eligible business deposits, depending on the mortgage program. - The guide also notes that transfers, loan proceeds, owner contributions and other non-business deposits may be excluded from income calculations. - Business expense factors must match the borrower’s actual business model and the selected lender’s guidelines. - Saxton said tax returns can understate the current cash flow of a rapidly growing business. - Saxton also said a bank statement loan is not automatically the best option for every self-employed borrower. - He said some borrowers may qualify more effectively through a 1099 program, business bank statements, personal bank statements, traditional tax returns or a mix of income sources. - The guide says borrowers still must meet requirements for credit, business history, down payment, cash reserves, property eligibility and ability to repay.

Between the lines: - The guide responds to a common problem for self-employed buyers: taxable income can be lower than actual business earnings because of deductions. - The examples show how different mortgage programs can produce very different qualifying income numbers even for borrowers with similar business success. - The emphasis on documentation suggests these products are meant for borrowers with nontraditional income, not for loans with lighter underwriting.

What's next: - The guide addresses questions from Utah business owners about whether they can qualify without relying solely on tax returns. - It also addresses whether 12 months of bank statements can be enough and whether bank statement loans can work for jumbo purchases. - More information is available in the full guide and on the company website.