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Alternative Documentation Loans
Alternative documentation loans, often called “alt-doc” or “bank statement” loans, are designed for borrowers who may not qualify through traditional income verification methods. These programs are ideal for self-employed individuals, business owners, or gig workers who have strong cash flow but don’t show consistent W-2 income.
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Bank Statement, 1099 and P&L programs
Credit scores of 620 or higher are required
30 Year Fixed terms are available
Down payments as low as 10%
Popular Alternative Documentation Loans Loan Topics
Mortgage Rates for Alternative Documentation Loans Loans
Your mortgage rate is an important factor in your overall home payment and family budget. Our company is built to offer lower mortgage rates which will help make your home more affordable.
On average, our mortgage rates are .326% lower than the national average. This equates to $23,836 in life of loan interest savings. See details on rate savings calculation here.
Program Highlights
Fixed or Adjustable Rates
No mortgage insurance
Primary Residence, Second Homes and Investment Properties
620 minimum credit score
Down payments as low as 10%
Frequently Asked Questions
Alternative Documentation loans or Alt Doc for short, are great options for self-employed borrowers that cannot provide traditional income documentation. Typically, these loans provide solutions for self-employed borrowers that may not show sufficient income on personal or business tax returns.
Who are Alternative Documentation (Alt Doc) loans best for?
The minimum down payment for an Alt Doc loan will be 10%. More down payment could be required depending on which type of loan you need, your credit score, occupancy type and loan amount.
How much down payment do I need for an Alt Doc loan?
Yes, you can be a first-time home buyer and use an Alt Doc loan to purchase a home.
Can a first-time home buyer use an Alt Doc loan?
Yes, the interest rates for Alt Doc loans are higher than traditional loan programs. These loans have higher risk due to their limited documentation requirements. These loans are typically used as a last resort and should be considered a temporary financing solution. These loans are best used to acquire a home with the goal of refinancing once traditional documentation can be provided.
Are interest rates higher for Alt Doc loan?
Alternative Documentation Loans
Overview
Alternative documentation loans, often called “alt-doc” or “bank statement” loans, are designed for borrowers who may not qualify through traditional income verification methods. These programs are ideal for self-employed individuals, business owners, or gig workers who have strong cash flow but don’t show consistent W-2 income. Instead of tax returns, lenders use bank statements, profit and loss statements, or asset documentation to assess income and ability to repay. Alt-doc loans offer flexible solutions for creditworthy buyers with unique financial situations.
How does a bank statement loan work?
Bank Statement programs are great alternatives for self-employed borrowers that have a sufficient cash flow of deposits but do not have sufficient qualifying income supported by tax returns.
Income is calculated by totaling the deposits for the most recent 12 months. If personal bank statements are provided with evidence of a separate business account, 100% of the deposits in the personal account may be used to qualify. If personal accounts are used with no evidence of a separate business account, the total deposits will be reduced by a 50% expense ratio unless the borrower's CPA provides evidence that a lower expense ratio is justified.
Business bank statements may be used instead of personal account statements. Deposits will be reduced by a 50% expense ratio and multiplied by the borrower's ownership in the business.
One borrower must be self-employed for at least two years. If a co-borrower has income from a non-self-employed source, traditional income documentation such as paystubs and W2's may be provided to document the co-borrower's income. However, under no circumstance may tax returns be provided on a bank statement program.
How does a 1099 program work?
Our 1099 Program is for borrowers that are 100% commission from one or several companies and in a profession that requires low overhead - laborers, consultants, independent contractors, commission employees, etc.
Income is calculated from the most recent 1099 or averaging the two most recent years 1099s. Borrowers with less than 2 years of self-employment must document at least two years in the same profession.
90% of the gross 1099 earnings may be used for qualifying income.
YTD earnings must be documented to support prior year(s) 1099 income. YTD income may be documented with YTD check stubs, 3 months bank statements or YTD earnings statements from the business.
How does a Profit & Loss loan program work?
Profit and Loss (P&L) programs are for borrowers that own 50% or more of a business, documented by a CPA letter, operating agreement, or its equivalent.
All P&L statements must be compiled by a CPA who has filed the business's most recent tax return. The CPA must attest that they have audited the business financial statements and certify that the P&L reflects an accurate summary of the business cash flow and expenses.
Borrower must be self-employed in their current profession for at least 2 years.
Are interest rates higher for Alt Doc loans?
Yes, the interest rates for Alt Doc loans are higher than traditional loan programs. These loans have higher risk due to their limited documentation requirements. These loans are typically used as a last resort and should be considered a temporary financing solution. These loans are best used to acquire a home with the goal of refinancing once traditional documentation can be provided.
Do all Alt Doc loans require Private Mortgage Insurance (PMI)?
No, our Alt Doc loans do not require any PMI, even if you borrow more than 80% of the home's value.
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