Qualify on your bank deposits, not your tax returns.
If you're self-employed, run a small business, or earn 1099 income, your tax returns probably understate what you actually make. Bank statement loans qualify you on 12 or 24 months of business or personal bank deposits, so legitimate write-offs don't penalize your buying power.
Self-employed borrowers with 2+ years in the same business. 1099 contractors. Real estate agents, consultants, restaurant owners, gym owners, doctors and dentists with practices, e-commerce sellers, gig economy workers, and anyone whose tax returns show low net income after legitimate business write-offs.
Use 12 months of personal bank deposits to qualify. Income calculated using 100% of qualifying deposits.
Use 24 months of personal bank deposits. Often a better fit if business income varies seasonally.
Use business bank deposits with an expense ratio applied (typically 50% or industry-standard).
Use a CPA-prepared profit and loss statement instead of bank statements. Available with 2 years business history.
Use 1099 forms directly for income calculation. Often a faster path than bank statements for true contractors.
Loan amounts up to $3M with bank statement income.
Refinance with cash out using bank statement income. Up to 80% LTV.
660 minimum for most programs. 700+ for best pricing.
10-20% on owner-occupied. 20-25% on investment property.
2 years minimum in the same business, verified by CPA letter or business license.
12 or 24 months of statements from the source account. Personal or business.
Typically 3-6 months of PITIA in liquid assets.
Common questions on bank statement loans, answered by Ken Clark Jr., Certified Mortgage Advisor.
Personal bank statement loans typically use 100% of qualifying deposits as income, divided by 12 or 24 months. Business bank statement loans apply an expense ratio (commonly 50% or an industry-specific number) and use the remainder as income. The math is run upfront so you see your qualifying number before applying.
No. That is the defining feature. Tax returns are not required for bank statement programs. Some lenders may want a CPA letter or business license to verify self-employment.
Most programs require 660 minimum, with best pricing at 700+. Some programs allow 620 credit with higher reserves.
Yes. Bank statement loans are available for owner-occupied, second home, and investment property purchases. Investment property typically requires 20-25% down.
Bank statement purchase loans typically close in 21-30 days. The bank statement analysis itself takes 3-5 business days, which can lengthen the timeline slightly versus conventional.
Yes, typically 1-2% higher because lenders take on more risk with alternative documentation. Many self-employed borrowers find the math still works because their actual qualifying income on a bank statement loan is much higher than what shows on their tax returns.
Yes. Bank statement rate/term and cash-out refinances are available. Up to 80% LTV on cash-out for owner-occupied properties.