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United Wholesale Mortgage (UWM), the top U.S. wholesale and purchase lender, has announced it will accept personal or business bank statements instead of income documents or tax transcripts to help the self-employed qualify for a loan.
The company said Wednesday the decision will better serve self-employed borrowers, and give independent mortgage brokers another competitive edge for working with borrowers who do not receive a paycheck and tax statement, or W-2, from an employer.
UWM said bank statement loans will be available only for self-employed borrowers seeking up to $3 million and with up to 90% loan-to-value ratio (LTV) with no mortgage insurance required.
Using bank statements to qualify borrowers defines the loan as a non-qualified (non-QM) mortgage. A non-QM loan is one that is not required to meet agency-standard documentation requirements, as required by the Consumer Financial Protection Bureau (CFPB).
In an emailed statement, UWM Chief Operating Officer Melinda Wilner said her organization "is constantly offering products that brokers are asking for. We are always looking for high-quality types of loans that our clients can offer to their borrowers, and we thought bank statement loans were a good opportunity to meet all of our brokers’ needs, while still being at the highest level of quality that UWM always provides."
The announcement of bank statement loans follows an earlier announcement that UWM will extend its no-cost appraisals for primary purchases until the end of April.
In January, UWM said it would credit borrowers up to $600 for appraisal costs on all conventional, government, and jumbo purchase loans for primary homes after they use UWM’s closing documents at initial underwrite process. The offer was set to last through March 31, 2022.