Bank Statement Loans

A bank statement loan is a non-QM mortgage that documents income with 12 or 24 months of bank deposits instead of tax returns. It is built mainly for self-employed borrowers, and some lenders also accept personal bank statements from contract workers who are not self-employed.

Justin Lazzaro, NMLS #1229453 | Reasy Financial, LLC, NMLS #2446155 | Licensed in Arizona, Pennsylvania, Florida, and Texas

Who a bank statement loan fits

If your tax returns show less than you earn, or your income comes from contract work, this loan looks at the money that actually comes in.

Business owners

Owners of established businesses whose tax returns understate cash flow after deductions and depreciation.

Contract workers and 1099 earners

Travel nurses, contract workers, independent contractors, and commission earners with steady deposits. Some lenders accept personal bank statements even if you are not self-employed.

Who it usually does not fit

Borrowers whose tax returns or pay stubs already qualify them. A conventional loan will usually cost less.

How qualifying works

1

We gather your statements

Twelve or twenty-four consecutive months of personal or business bank statements, plus proof the business has been operating, typically for two years.

2

The lender analyzes deposits

Business-related deposits are totaled. Transfers, refunds, and unusual one-time deposits are backed out.

3

An expense factor is applied

On business accounts, the lender deducts a percentage for expenses, or uses a figure prepared by your tax professional, to reach qualifying income.

Every lender calculates bank statement income differently. The same deposits can produce very different qualifying income, which is why I compare methods first.

How it compares to other loans

The main difference between these loans is how your income is documented. Here is a side-by-side look.

How bank statement loans compare to other loan types
Loan typeHow income is documentedOften a fit for
Bank statement loansDeposits shown on business or personal bank statementsSelf-employed borrowers
Conventional loansPay stubs, W-2s, and tax returnsBorrowers whose documented income qualifies on its own
DSCR loansThe rental income of the property being financedReal estate investors
Asset depletion loansCalculated from eligible savings, investment, and retirement balancesBorrowers with substantial assets and limited paycheck income

Three things to know before you apply

1

Account type changes the math

Deposits into a personal account are often counted in full, while business account deposits are reduced by an expense factor. Which one you use matters.

2

Your tax professional can help

A letter or profit and loss statement from a licensed tax preparer can support a lower expense factor than the lender's default.

3

It usually costs more

Non-QM loans generally carry higher rates and costs than conventional loans and require a larger down payment. If your tax returns qualify, that is usually the better value.

Guidelines change. I confirm current requirements with the lender before quoting anything.

Common questions about bank statement loans

Short answers to common questions. Program rules vary by lender, so treat these as general guidance, not a loan decision.

Do I need to provide tax returns?

No. Income is documented with bank statements. Lenders still verify that your business exists and review your credit and assets.

How long must I be self-employed?

Most lenders look for about two years of self-employment. Some allow less with prior experience in the same line of work.

Personal or business statements?

Either one. If you run business income through a personal account, some lenders will treat it like a business account.

What property types are eligible?

Primary residences, second homes, and investment properties are all commonly eligible, with terms that vary by occupancy.

Can I refinance or take cash out?

Yes. Purchases, rate and term refinances, and cash-out refinances are all commonly available.

Where do you offer these loans?

I am licensed in Arizona, Pennsylvania, Florida, and Texas, and I compare bank statement programs across multiple wholesale lenders.

Ready to talk it through?

Pick a time that works for you. We'll go over your goals and next steps, no pressure, just a conversation. Prefer to call or text instead? Reach me directly at (412) 638-4982, or book a quick Zoom if that's easier.