Bank Statement Loans: A Flexible Mortgage Solution for Self-Employed Borrowers

What Are Bank Statement Loans?

Bank statement loans are a type of non-QM (non-qualified mortgage) designed for self-employed individuals, freelancers, business owners, and gig workers who may not have traditional W-2 income but have strong cash flow. Instead of tax returns and pay stubs, lenders use personal or business bank statements to verify income.

These loans offer flexibility and accessibility for borrowers who have steady deposits but write off a large portion of their income for tax purposes.

Key Benefits of Bank Statement Loans

✔ No Tax Returns Required – Instead of W-2s, pay stubs, or tax returns, borrowers submit 12-24 months of bank statements to verify income.

✔ Ideal for Self-Employed Borrowers – Great for entrepreneurs, independent contractors, real estate investors, and small business owners.

✔ Higher Loan Amounts – Many lenders allow loan amounts up to $3 million, depending on income and assets.

✔ Flexible Debt-to-Income (DTI) Ratios – Lenders assess cash flow rather than taxable income, allowing for higher DTI ratios than traditional loans.

✔ Credit Score Flexibility – Many programs accept borrowers with credit scores as low as 620, though better rates are available for scores above 700.

✔ Multiple Property Types Allowed – Can be used for primary residences, second homes, and investment properties.

How Do Bank Statement Loans Work?

1️⃣ Application & Bank Statement Review

• Borrowers submit 12-24 months of personal or business bank statements.

• Lenders review deposit history to determine qualifying income.

2️⃣ Income Calculation

• Lenders calculate income based on average monthly deposits.

• Some lenders use 100% of personal deposits or 50-70% of business deposits after accounting for business expenses.

3️⃣ Down Payment & Loan Terms

• Minimum 10%-20% down payment, depending on credit score.

• Loan terms typically 15-30 years, with fixed or adjustable rates available.

4️⃣ Closing & Funding

• Once approved, the loan is processed, and funds are disbursed for home purchase or refinance.

Who Qualifies for a Bank Statement Loan?

✔ Self-employed borrowers with at least 2 years in business

✔ Freelancers, entrepreneurs, and gig economy workers

✔ Real estate investors & business owners

✔ Borrowers with strong cash flow but significant tax write-offs

Bank Statement Loans vs. Traditional Mortgages

When to consider bank statement loans

✅ You’re self-employed and have difficulty qualifying with traditional income documentation.

✅ You have strong cash flow but tax deductions reduce your taxable income.

✅ You need higher loan limits than conventional loans allow.

✅ You want to purchase an investment property without W-2 income verification.

Get Started with a Bank Statement Loan

Bank statement loans provide flexible financing for self-employed individuals who need alternative income verification. If you’re looking to buy a home, refinance, or invest in real estate, this program could be the perfect fit for you.

Want to see if you qualify? Contact us today to start your application!