If you are self-employed, you know the challenge. Your actual income may be strong, but your tax returns tell a different story. Write-offs, deductions, and business expenses that reduce your taxable income can make it difficult to qualify for a conventional mortgage.
A bank statement loan solves that problem. Instead of reviewing your tax returns, the lender looks at your actual bank deposits over the past 12 to 24 months. If your deposits reflect a healthy, consistent income, you may qualify for a mortgage based on what you actually earn.
At Lender Express, we work with lenders who specialize in bank statement programs for self-employed borrowers. We help you find the right fit and walk you through the process from start to finish.
WHAT IS A BANK STATEMENT LOAN?
A bank statement loan is a type of Non-QM mortgage that uses bank deposit history as proof of income. Instead of W-2s and tax returns, the lender reviews 12 or 24 months of your personal or business bank statements to calculate your qualifying income.
The lender adds up your total deposits over the review period and applies an expense factor to estimate your net income. For personal accounts, most or all of the deposits may count. For business accounts, lenders typically apply an expense ratio to account for business costs.
Bank statement loans are designed for borrowers who are consistently earning but whose tax returns understate that income due to legitimate business deductions.
KEY BENEFITS
- No tax returns required for income verification
- Qualify using 12 or 24 months of bank statements
- Personal or business accounts accepted
- Available for purchase and refinance
- Available for primary residences, second homes, and investment properties
- Loan amounts available up to jumbo levels
- Competitive rates for borrowers with strong credit and deposit history
HOW IT WORKS
Here is a simplified overview of how a bank statement loan works.
- Gather your bank statements — Provide 12 or 24 months of personal or business bank statements.
- Lender calculates your income — Deposits are reviewed, averaged, and an expense factor is applied to determine qualifying income.
- Credit and asset review — The lender reviews your credit score, reserves, and down payment availability.
- Pre-approval issued — Once income and credit are reviewed, you receive a pre-approval to begin shopping.
- Loan closes — The lender completes underwriting and you close on your home.
Use our mortgage calculator to estimate your monthly payment based on different loan amounts and interest rates.
WHO THIS LOAN IS BEST FOR
- Self-employed borrowers and independent contractors
- Small business owners and sole proprietors
- Freelancers and gig economy workers with consistent income
- Borrowers whose tax returns reflect significant deductions
- Borrowers who have been self-employed for at least two years
- Borrowers with strong credit and healthy bank deposit history
BASIC REQUIREMENTS
These are general guidelines. Requirements vary by lender and borrower profile.
| Self-Employment History | Typically 2 years of self-employment required |
| Bank Statements | 12 or 24 months, personal or business |
| Minimum Credit Score | Generally 620 or higher; better terms at 680+ |
| Down Payment | Typically 10% to 20%, depending on loan amount and credit |
| Reserves | Several months of mortgage payment reserves often required |
| Loan Amounts | Up to jumbo levels depending on lender and program |
| Property Types | Primary residence, second home, investment property |