If you’re self-employed or a small business owner, you already know that getting approved for a mortgage can be a huge pain.
You’ve probably been told “no” more than once — or jumped through countless hoops to prove your income, only to be denied after providing all the documents and going through the process.
That’s where bank statement mortgage loans come in.
If you’ve been struggling to qualify with traditional lenders or are just tired of explaining every line on your tax returns, this is for you.
I’m going to break down what a bank statement mortgage is, how it works, who it’s for, and — most importantly — how to shop for the best terms and rates in the market right now.
What is a bank statement mortgage loan?
A bank statement loan is exactly what it sounds like: a home loan that uses your bank statements (instead of tax returns) to prove your income.
This loan is designed for self-employed borrowers — business owners, freelancers, 1099 contractors — who don’t always show consistent income on paper but make plenty to afford a home.
Maybe your business earns $400,000 a year, but you write off a ton of expenses to lower your tax bill.
That’s smart — but it can hurt your chances of qualifying for a traditional mortgage.
With a bank statement loan, lenders don’t look at your tax returns at all.
Instead, they review 12 or 24 months of your personal or business bank statements and calculate your income based on your monthly deposits. They want to see there is enough money coming into your business to afford the mortgage payment you are trying to take on.
Do remember, though, having a lot of money in your account is not enough. You need to show actual business activity — meaning consistent deposits that reflect real income. If your statements show strong, regular deposits, you might still qualify… even if your tax return shows very little income.
How to qualify for a bank statement loan
Self-employed or 1099 contractor
In order to qualify for a bank statement loan, you’ll need to be self-employed or be paid with a 1099 for at least 2 years. If you get a W-2 paycheck from an employer, a bank statement loan is not going to work for you.
Minimum Credit Scores & Down Payments
Every lender is different, but here’s a general idea of what’s required:
- 640–659 FICO → Max 75% Loan-to-Value (25% down)
- 660–699 FICO → Max 80% LTV
- 700–719 FICO → Max 85% LTV
- 720+ FICO → Max 90% LTV
Even with less than 20% down, there’s no PMI (private mortgage insurance) on a bank statement loan — that’s a big plus to this program as well.
Need help calculating your eligibility? Reach out to us to get a personalized assessment of your property’s equity potential!
Pros & Cons of Bank Statement Loans
✅ Pros:
- No tax returns needed
- Easier qualification for self-employed borrowers
- Can often qualify for more than you would with a traditional mortgage
- No PMI, even with less than 20% down
- Only 2-year wait after major credit events (bankruptcy, foreclosure, etc.)
❌ Cons:
- Higher down payments
- Interest rates are typically higher than FHA or conventional loans
- Higher credit score requirements
- Not eligible for down payment assistance programs or government grants
It’s not a one-size-fits-all solution, but for the right person, this program can be a really good option and maybe even the only option for qualify to purchase a home.
real life example
Let’s say you’re a freelance photographer. Your business grosses $300,000 a year, but your Schedule C shows a net income of just $25,000 after your deductions. That’s not enough to qualify for a traditional loan, so heres where this program comes in.
With a bank statement loan, we use your actual deposits — not your tax write-offs — to calculate your income. That could easily boost your qualifying income to $150,000+ and put you in a position to buy what you really want and can afford.
How to apply for a bank statement loan
Here’s the most important piece of advice: don’t walk into a big bank expecting this kind of loan, you wont find it.
Banks like Wells Fargo, Chase, Truist, and most credit unions do not offer bank statement mortgages, this program is specific to lenders willing to provide it.
Instead, work with a mortgage broker like us! (Give us a call at 770-740-4050 or book a strategy call here)
Not only do we specialize in Non-QM mortgages like bank statement loans, but we have access to multiple lenders that specialize in these programs. I personally work with over 20 lenders who offer bank statement loans, and I can check to compare guidelines and interest rates to find the best fit for you and your situation.
This isn’t a cookie-cutter loan — you need someone who understands how to structure self-employed income and guide you through the process so that it saves you the most time and money.
