Qualifying for a home loan with bank statements only is an option available only to people whose income is not from wages. The income on business taxes is not always a good reflection of how well a business (freelancer, contractor) is doing.
This article is meant especially for first-time home buyers chasing the best mortgage loan. It will explain how lenders qualify people for a mortgage loan and show that for many the amount they qualify for is too high for them.
The draw-backs of USDA Mortgage Loans, compared to FHA especially?
The debt-to-income ratios cannot be more than 29%/41% (FHA’s DTI’s are 47%/56%). In other words, the same income buys more house under FHA than under USDA programs (occasionally, a lender will over-write these limits… due to great credit or lots of money in the bank).
Credit scores must be 640 or higher (middle credit scores, that is).