Deposits instead of tax returns
Most programs review 12 or 24 months of statements and apply an expense factor, or use a profit and loss statement, to arrive at qualifying income.
Back to self employed loan optionsYOUR RETURNS SAY ONE THING.
Ed Parcaut · Mortgage strategist in Modesto, California · NMLS #235384
YOUR RETURNS SAY ONE THING.
YOUR DEPOSITS SAY ANOTHER.
A bank statement loan lets a self employed borrower document income from 12 or 24 months of business or personal bank deposits instead of tax returns. It exists for business owners whose write offs make a profitable company look small on paper. These are non qualified mortgage programs offered by individual lenders, so terms, down payment and requirements differ from conventional loans.
Who it fits
BUILT FOR OWNERS
WHO WRITE OFF WELL.
The deductions that lower your tax bill also lower the income a conventional lender can count. A bank statement review looks at the money actually moving through your accounts. It is not always the better choice, so the honest first step is comparing it with a conventional file side by side.
Business or personal accounts
Some lenders accept business account statements, some personal, some either. Which one tells the clearer story depends on how you pay yourself.
Trade offs to weigh
Pricing and down payment requirements are usually different from a conventional loan. That is why it is worth checking whether your returns already qualify before choosing this route.
Primary homes, second homes and investments
Many bank statement programs cover more than one occupancy type, subject to each lender's guidelines.
Program availability and requirements vary by lender and by your individual file. Nothing here is a commitment to lend.
What to gather
BRING THESE
TO THE TABLE.
You do not need everything before we talk. This is what a bank statement file usually asks for.
- 12 or 24 months of bank statements. Every page, for the account or accounts the income will be calculated from.
- Proof the business is active. A business license, entity filing, or a letter from your accountant or tax preparer.
- Ownership percentage. Lenders need to know how much of the business you own, often confirmed by your accountant or entity documents.
- Asset statements for down payment and reserves. Enough to show where the funds for closing are coming from.
What is a bank statement loan?+
A mortgage where a self employed borrower's income is calculated from bank deposits over 12 or 24 months rather than from tax returns. It is offered by individual lenders as a non qualified mortgage program.
Who is a bank statement loan for?+
Business owners, independent contractors and other self employed borrowers whose tax returns show less income than the business actually produces, often because of legitimate write offs.
Do I still need tax returns?+
Usually not for income on a bank statement program. Lenders will still want proof the business exists and has been operating, commonly for around two years.
Is a bank statement loan more expensive?+
Often the pricing and down payment are different from a conventional loan. Whether the trade off makes sense depends on how your returns compare, which is why both are worth reviewing first.
Can I use personal bank statements?+
Some programs allow personal statements, others require business statements, and some accept either. The right choice depends on how money moves between you and the business.
Related reading
KEEP LOOKING.
Self employed borrowers
All the ways business income is reviewed, including conventional, FHA and VA.
Read the guideDSCR loans for investors
Qualify a rental property on its rent rather than your personal income.
See how DSCR worksBusiness owner articles
Plain language articles on documenting income and preparing a file.
Read the articlesReviews on Google
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Working with Ed Parcaut on our vacation home purchase was an outstanding experience from start to finish. Ed's expertise and deep knowledge of the lending process made everything feel seamless. He took the time to explain every step clearly, answered all of our questions with patience, and helped us navigate the unique aspects of financing a second home with confidence. What truly stood out was Ed's responsiveness and efficiency. No matter the time or situation, we always received quick updates and fast answers, which made the entire process move smoothly and on schedule. His professionalism, attention to detail, and commitment to excellent service exceeded our expectations. I highly recommend Ed to anyone looking for a knowledgeable, reliable, and highly responsive lender — for any home purchase.
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