To calculate income for a 24-month bank statement mortgage loan, lenders typically take an average of the borrower’s bank account balances over the last 24 months. This average is used to determine the borrower’s monthly income. The lender will then use this monthly income to qualify the borrower for a loan and to determine the loan amount.
The process usually goes as follows:
- Gather bank statements: Borrowers will need to provide bank statements for the last 24 months, which the lender will use to calculate the average balance.
- Average balance: The lender will take the average of the borrower’s account balances over the last 24 months. This will be used to determine the borrower’s monthly income.
- Monthly income: The lender will then divide the average balance by 24 to determine the borrower’s monthly income.
- Qualification: The lender will use the borrower’s monthly income, along with other financial information such as credit score, assets, liabilities, etc. to determine the borrower’s ability to repay the loan.
- Loan amount: The lender will use the borrower’s monthly income to determine the loan amount, which is typically a percentage of the borrower’s income.
It is important to note that the lender’s calculation may vary and some lenders may use different methods to calculate the income, like using the highest balance, etc. It’s important to understand the lender’s calculation method before applying for the loan.