Bank
Statement Mortgage

Bank Statement Loans are primarily designed for self-employed individuals, small business owners, freelancers, and independent contractors whose tax returns (W-2s) do not accurately reflect their actual cash flow. The Problem: Self-employed borrowers often use legal tax write-offs and deductions to reduce their taxable income, which makes their official tax returns show a low or insufficient income to qualify for a traditional conventional mortgage. The Solution: This Non-Qualified Mortgage (Non-QM) program bypasses tax returns entirely, using bank deposits to prove the ability to repay the loan.
Learn more about our loan products here.

Lenders use the deposits in your bank statements (either personal or business) over a specific period, typically 12 or 24 months, to calculate an average monthly qualifying income. For Personal Bank Statements: The lender averages the total deposits and often counts 100% of that average monthly deposit as your qualifying income. For Business Bank Statements: The lender averages the total deposits and then applies an “Expense Factor” (or haircut) to estimate the net income after business expenses. This factor is often 50% (meaning they use 50% of the deposits as income), but can range from 20% to 70% depending on the industry and whether you provide a CPA letter.
Explore more about Bank Statement Loans.

Most lenders require either 12 or 24 consecutive months of bank statements from the same account. The number of months chosen often depends on your business’s financial history: 12 months may be used if your business had a recent, verifiable increase in income, or 24 months for a longer, more stable income trend.
Learn more about the documents needed for your loan application.

You can typically use either personal or business bank statements, but generally not for the same period. Personal Statements: Used if all your business income is consistently deposited into your personal checking account. Business Statements: Used if you have a dedicated business account. If you use business statements, you will need to provide a business license or a CPA letter to verify your ownership and that the business is ongoing.
Check out other types of loan products we offer.

Because bank statement loans carry a higher risk for the lender than conventional loans, the requirements are often higher: Minimum Down Payment: Typically, 10% to 20% of the purchase price. A higher down payment (e.g., 20%) often results in a better interest rate and loan terms. Minimum Credit Score (FICO): Generally, it ranges from 620 to 680 at a minimum, with the best rates reserved for borrowers with scores above 700.
Discover more about loan requirements and terms.

Yes, they generally do. Bank Statement Loans are a Non-QM product and are priced slightly higher than conventional or government-backed mortgages. The interest rate is typically 1% to 2% higher than the rate you would receive on a conventional loan, reflecting the increased risk the lender takes by not verifying income with traditional IRS documents.
Learn more about interest rates on our products.

You can still qualify for a bank statement loan even if you are not the 100% owner of your business. Lenders typically only require you to own a minimum percentage of the business, often 25% or more. The lender will then only use your percentage of the qualified business deposits to calculate your qualifying income.
Learn more about the eligibility criteria here.

These loans offer flexibility and can be used for a variety of property types such as primary residence, second homes or vacation homes, investment, or rental properties.
See the types of properties we finance.

Underwriters scrutinize bank statements to ensure the funds and income are stable, “sourced,” and “seasoned.” Unexplained Large Deposits: Any single deposit significantly larger than your average monthly income must be “sourced” (i.e., you must provide documentation to show where it came from), and it cannot be a loan or a prohibited gift. Overdrafts or NSF Fees: Multiple instances of Non-Sufficient Funds (NSF) or overdraft fees are red flags for poor financial management. “Unseasoned” Funds: Funds intended for the down payment and closing costs must typically be in your account for at least 60 days (“seasoned”) to confirm they are yours and not a short-term loan.

Typically, no, if the loan is for a primary residence or a second home. Since the Dodd-Frank Act, most owner-occupied loans (even Non-QM) do not carry a prepayment penalty. However, it is always crucial to confirm this with your specific lender, especially if the property is an investment or rental.
Contact us for specific loan details or to discuss your options.