Bank Statement Loan
The mortgage built for business owners who earn well but don't look like it on paper.
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Everything you need to know about the Bank Statement Loan in under 3 minutes
What is the Bank Statement Loan?
What are the benefits?
- No tax returns required — Your income is verified using bank deposits, not your 1040 or Schedule C.
- Qualify on actual cash flow — We calculate income from real deposits, not tax-adjusted net income reduced by write-offs.
- Personal or business statements accepted — You can qualify using either account type, or a combination of both.
- Loan amounts up to $4 million— Jumbo-level financing is available, making it viable for high-value purchases.
- CPA letter can increase qualifying income — If your actual business expenses are below the standard 50% expense factor, a CPA letter can document lower costs and qualify you for more.
What are the requirements?
- 12–24 consecutive months of personal and/or business bank statements (no missing pages)
- Minimum credit score of 620–660 (varies by lender)
- At least 2 years of self-employment history in the same field
- Down payment of 10–25% depending on credit profile and loan size
- Debt-to-income ratio reviewed based on calculated deposit income
- 3–12 months of cash reserves (PITI) held in liquid accounts after closing
- Proof of self-employment (business license, CPA letter, or similar documentation)
- No W-2s, tax returns, or pay stubs required for income verification
Today’s Bank Statement Loan rates
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Frequently Asked Questions
- How is my income calculated with a bank statement loan?
Lenders add up your eligible deposits over 12 or 24 months, remove transfers and non-income items, and divide by the number of months to get an average monthly income. For business accounts, a standard 50% expense factor is applied to that average — unless you provide a CPA letter documenting lower actual expenses, which can raise your qualifying income.
- Should I use personal or business bank statements?
Sole proprietors who deposit business income directly into personal accounts often qualify more easily using personal statements. If your business revenue flows through a separate business account, business statements typically work better — especially when paired with a CPA letter showing actual expenses below the 50% standard. Some lenders allow a combination of both.
- Are bank statement loan rates higher than conventional rates?
Yes. Because these are non-QM loans with alternative income verification, rates typically run 1–3% higher than conventional mortgage rates. The tradeoff is access to financing that would otherwise be unavailable — many self-employed borrowers simply cannot qualify for a conventional loan despite strong cash flow.
- Do I need a large down payment?
Most programs require between 10% and 25% down, compared to as low as 3–5% for conventional loans. The exact amount depends on your credit score, loan size, and lender. According to the National Association of Realtors, self-employed homebuyers put down an average of 18% — so this is consistent with typical patterns in this borrower category.
- Can I use a bank statement loan to refinance?
Yes. Bank statement loans are available for both purchases and refinances, including rate-and-term refinances and cash-out refinances (typically up to 80% of the property’s value). If your current mortgage was based on tax returns, you can refinance using bank statements even if your reported income hasn’t changed.
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