Bank statement loans for self-employed borrowers
If your tax returns understate what your business earns, a bank statement loan uses your actual deposits to calculate income. We compare non-QM lenders to find the program that fits your statements.
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Overview
A bank statement loan is a non-qualified mortgage (non-QM) designed for self-employed borrowers. The lender reviews 12 or 24 months of personal or business bank statements and calculates income from your deposits, so the write-offs on your tax return do not reduce your qualifying income. It works for business owners, independent contractors, gig workers and 1099 earners who have usually been self-employed for at least two years.
For business statements, lenders usually apply an expense factor to your deposits or use a letter from your CPA or tax preparer showing your actual expense ratio. Personal statements are often counted at full deposit value when business and personal funds are kept separate. Large or unusual deposits must be explained and sourced. These loans can finance a primary residence, a second home or an investment property.
Bank statement guidelines differ a great deal between lenders. One may use a lower expense factor, and another may allow a shorter self-employment history or count certain transfers. QMS reviews your statements first, calculates income the way each lender does, and places your file where your numbers work. Pricing is generally higher than conventional financing to reflect the alternative documentation. All loans are subject to credit approval and lender guidelines.
Is it a good fit?
- Are self-employed, a 1099 contractor or a business owner
- Write off enough expenses that your tax returns show low income
- Have consistent deposits over the past 12 or 24 months
- Have been self-employed for about two years or more
- Keep business and personal finances in separate accounts
- Want to buy or refinance a primary home, second home or rental
What you'll need
- 12 or 24 months of personal or business bank statements, all pages
- Business license, CPA letter or other proof of self-employment
- CPA or tax preparer expense letter, if the lender allows one
- Explanations for large or unusual deposits
- Asset statements for down payment and reserves
- Government-issued photo ID
How it works
How it works with QMS
Review your statements
We review your deposits and calculate qualifying income under each lender's method.
Pick the program
We compare expense factors, history rules and pricing, then recommend the program that fits.
Document and close
We gather deposit explanations, submit to underwriting and manage conditions through closing.
FAQ
Bank Statement loan FAQs
Don't see yours? Call us or send a message. We answer the same business day.
305-425-1990How is income calculated on a bank statement loan?
The lender adds up eligible deposits over 12 or 24 months and removes transfers between your own accounts and other deposits that are not income. For business accounts, it then applies an expense factor or uses your CPA's expense letter. The result is divided by the number of months reviewed to get the monthly income used to qualify.
Should I use personal or business bank statements?
It depends on how money moves through your accounts. If your business income goes into a personal account, personal statements may show higher qualifying income because no expense factor applies. If personal and business funds are mixed, business statements are often cleaner. We review both and run the numbers each way before you decide which to submit.
Do I need tax returns for a bank statement loan?
Generally no. Bank statement programs are built to qualify you without personal or business tax returns. Lenders still confirm that your business exists, usually through a business license, a CPA letter or a state filing. They also verify your identity, credit and assets the same way they would for any other mortgage.
Are bank statement loans more expensive?
Pricing is usually higher than a conventional loan because the lender is relying on alternative documentation. How much higher depends on your credit, down payment, reserves and property type. Many borrowers use a bank statement loan to buy now and refinance into conventional financing later, once their tax returns support the income. We can review that plan with you.
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Know your numbers before you make an offer.
Tell us about your scenario and we'll price it across our lenders the same business day.