A Bank Statement Loan is a great solution for Self-Employed individuals who may not have traditional income documentation.

A Bank Statement Loan provides a way for the self-employed to qualify for a mortgage without providing tax returns to document income.

What is a Bank Statement loan?

A Bank Statement Loan helps self-employed people get a mortgage. They can use their bank statements instead of regular income documents, like tax returns. This can assist individuals who have irregular income or who have many deductions on their taxes. It can be difficult for them to accurately display their earnings.

Lenders use bank statements to determine a borrower’s income and ability to repay a loan. They analyze the borrower’s financial activity over a specific period. This helps them assess the borrower’s financial stability and creditworthiness.

The bank statement loan process involves reviewing the borrower’s income and expenses. They use this information to make a decision on whether to approve the loan. This different type of paperwork can help self-employed people get a mortgage and purchase a house more easily.

Who are Bank Statement Loans for?

People without typical income proof, like tax returns or pay stubs, can still qualify for a mortgage. Self-employed borrowers can show they can repay a loan by providing bank statements that prove a steady income. This flexibility can be especially beneficial for those with fluctuating income or multiple sources of revenue.

Business Owners
Independent Contractors
Entrepreneurs
Consultants
Gig Workers
Realtors
Retirees

How do Bank Statement Loans work?

Instead of using traditional income documentation (W-2’s or Tax Returns), bank statement loans only use bank statements to determine the qualifying income. You can use either personal bank statements or business bank statements.

Type of Bank Statement Account

Personal Bank Statements: If you are self-employed or have personal income sources, you might use your personal bank statements. These typically include income from freelance work, investments, or other sources not tied to a business.
Business Bank Statements: If you run a business or are self-employed, using business bank statements might be more appropriate. Lenders look at the deposits into your business accounts to assess your income from the business.

Calculating the Qualifying Income

To calculate the qualifying income, all deposits are added and then averaged over a 12 month or 24 month period. The resulting number is considered the “monthly income” and used for qualifying and debt-to-income ratio calculation.

Advantages

No Tax Returns Needed: One of the major benefits is that you don’t need to provide tax returns or detailed income documentation, which is beneficial if you have irregular or non-traditional income sources.
Flexibility: This method is particularly useful for self-employed individuals, freelancers, or those with multiple income streams.

Who Qualifies for a Bank Statement Loan?

Qualifying for a Bank Statement Home Loan depends on a number of factors. Here is a short list t a short list of some of the requirements:

Self-employed for at least 2 years
Have at least a 10% down payment
Credit score of at least 620

What documentation is needed?

Depending on the program, you will need to provide the last 12 or 24 months bank statements. The statements will need be in .pdf format and include every page as posted by your bank.

Where are they available?

Available anywhere in the states we operate in. Our dedicated teams of local mortgage brokers are ready to help you find the home loan that best suits your needs.

Bank Statement Loan Georgia
Bank Statement Loan Alabama
Bank Statement Loan Florida
Bank Statement Loan North Carolina
Bank Statement Loan South Carolina

Ready to get started?

If you are self-employed and interested in learning more about bank statement loan, we are here to answer all of your questions. We will walk through the numbers and the process, from application to closing.