Your Business Tells a Bigger Financial Story.
Bank statement loans offer an alternative way for eligible self-employed borrowers to document income using qualifying bank deposits instead of relying solely on traditional tax returns.
What Are Bank Statement Loans?
Bank statement loans are alternative mortgage programs designed primarily for self-employed borrowers who may have strong cash flow but whose taxable income does not fully represent their ability to qualify for a mortgage.
Instead of relying solely on traditional income documentation such as W-2s and tax returns, qualifying programs may use deposits shown on personal or business bank statements to calculate eligible income.
This can provide another path to financing for business owners, entrepreneurs, independent professionals, and other self-employed borrowers with established income that can be documented through qualifying bank activity.
Program requirements vary, and bank statement financing still requires borrowers to demonstrate the ability to repay the mortgage.
At a Glance
| Designed For | Primarily self-employed borrowers |
| Income Documentation | Qualifying personal or business bank statements may be used |
| Statement Period | Common program options may review 12 or 24 months of bank statements |
| Tax Returns | May not be required to calculate qualifying income under eligible programs |
| Down Payment | Requirements vary based on credit, loan amount, property, and program |
Is a Bank Statement Loan Right for You?
A bank statement loan may be worth exploring if you:
- Are self-employed or own your own business
- Have consistent deposits that demonstrate established cash flow
- Have tax returns that may not fully reflect your current financial picture
- Want to explore an alternative to traditional income documentation
- Use legitimate business deductions that reduce your taxable income
Important Considerations
Income Is Calculated Differently
Bank statement programs evaluate qualifying deposits over a specified period to determine eligible income. The calculation method depends on whether personal or business bank statements are being used and the requirements of the particular loan program.
Business Expenses Matter
When business bank statements are used, qualifying income generally isn't determined by simply adding every deposit together. A program may apply an expense factor or use other documentation to determine the portion of business revenue that can reasonably be considered income.
Deposits Must Be Reviewed
Bank statements are evaluated for qualifying deposits, consistency, unusual activity, transfers, and other items that may need to be documented. Not every deposit appearing on a bank statement will necessarily be treated as qualifying income.
It's Still a Fully Underwritten Mortgage
Alternative income documentation does not mean there are no qualification requirements. Credit, assets, debts, reserves, property, loan-to-value, and the borrower's ability to repay are still evaluated.
Explore Related Loan Programs
1099 Loans
Alternative financing for eligible independent contractors and self-employed borrowers whose earnings are primarily documented through 1099 income.
LEARN MOREDSCR Loans
Investment property financing that may qualify eligible real estate investors primarily using the property's rental income rather than traditional personal income.
LEARN MOREJumbo Loans
Higher loan amount financing for qualified borrowers purchasing or refinancing properties above applicable conforming loan limits.
LEARN MOREConventional Loans
Traditional mortgage financing with a variety of terms and property options for borrowers who meet conventional income and underwriting requirements.
LEARN MORECommon Questions About Bank Statement Loans
A bank statement loan is an alternative mortgage program that may allow eligible borrowers to document qualifying income using bank statement activity instead of relying solely on traditional tax-return income.
These programs are primarily designed for self-employed borrowers, including business owners, entrepreneurs, independent professionals, and others whose income may be better demonstrated through qualifying bank deposits.
Requirements vary by program. Many bank statement programs evaluate a defined history of bank activity, with 12-month and 24-month documentation periods commonly available.
Certain bank statement programs may not require personal tax returns to calculate qualifying income. Other documentation may still be required to establish self-employment, verify the business, document assets, or satisfy underwriting requirements.
See What Options May Work for You
Bank statement loan programs, documentation requirements, rates, terms, loan amounts, and eligibility guidelines vary by lender and are subject to change. Bank statement financing does not eliminate underwriting or ability-to-repay requirements. Not all applicants will qualify. Contact Premier Point Mortgage for current program requirements and available options.
