Bank Statement Loan

Bank statement loans are a specific type of Non-QM mortgage that lets self-employed borrowers, freelancers, gig workers, and small business owners qualify based on deposits to their bank accounts rather than the adjusted income shown on tax returns. Lenders typically review 12 or 24 months of personal and/or business bank statements, then calculate qualifying income from the deposits using an expense ratio (commonly 50% for personal accounts and a custom ratio for business accounts).

This product exists because many self-employed borrowers legitimately reduce taxable income through allowable business deductions, mileage, depreciation, and retirement contributions. The result is a tax return that understates their true cash flow. A bank statement program looks at money actually moving through the account, giving an honest picture of what the borrower earns. Two-year self-employment history is standard, though some lenders accept one year with offsetting factors.

Bank statement loans are available for purchase, rate-and-term refinance, and cash-out refinance on primary residences, second homes, and investment properties. Loan amounts commonly reach $2–3 million with credit scores starting around 620. Expect interest rates roughly 0.5%–1.25% above comparable conventional pricing, balanced by the ability to qualify when traditional W-2 documentation cannot.