If you’re self-employed or don’t have traditional income documents, a bank statement loan can help you qualify for a mortgage.
A bank statement loan is a type of mortgage that allows you to qualify using your bank deposits instead of tax returns or W-2s.
What Is a Bank Statement Loan?
A bank statement loan is designed for:
- Self-employed individuals
- Business owners
- Freelancers
- Entrepreneurs
Instead of tax returns, lenders review:
- 12–24 months of bank statements
- Your deposit history
- Cash flow patterns
How Does a Bank Statement Loan Work?
Lenders calculate your income based on:
- Monthly deposits
- Consistency of income
- Business vs personal accounts
They determine how much income you actually earn from your deposits.
Types of Bank Statement Loans
1. Personal Bank Statement Loan
- Based on personal account deposits
- Used by freelancers or sole proprietors
2. Business Bank Statement Loan
- Based on business account deposits
- May apply an expense factor (e.g., 50%)
Who Should Use a Bank Statement Loan?
This loan is ideal if you:
- Are self-employed
- Write off a lot of expenses on taxes
- Have strong cash flow but low reported income
Not sure if you qualify?
✔ Check Your Bank Statement Loan Eligibility
✔ Get Pre-Approved Today
Key Benefits
- No tax returns required
- Flexible income qualification
- Works for self-employed borrowers
- Can be used for primary homes and investment properties
Potential Downsides
- Higher interest rates than traditional loans
- Larger down payment (typically 10%–20%)
- More documentation than DSCR loans
How It Works
Monthly deposits: $10,000
Lender uses 50% expense factor
Qualifying income = $5,000/month
Ready to Buy a Home Without Tax Returns?
Bank statement loans make it easier for self-employed borrowers to qualify.
✔ Apply for a Bank Statement Loan
✔ Speak With a Loan Expert
Read More DSCR Loan vs Bank Statement Loan: Which Is Better?
FAQs
What is a bank statement loan?
A mortgage that uses bank deposits instead of tax returns for income verification.
Who qualifies for a bank statement loan?
Self-employed individuals, freelancers, and business owners.
How many bank statements are required?
Typically 12 to 24 months.
Are bank statement loans expensive?
They may have slightly higher interest rates than traditional loans.
Can I use it for a primary home?
Yes, unlike DSCR loans.
