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A Bank Statement Loan is a type of non-qualified mortgage (non-QM) designed for self-employed individuals who may not have traditional income documentation like W-2s or pay stubs. Instead of tax returns, lenders use personal or business bank statements (typically 12–24 months) to verify the borrower’s income.This loan is especially popular among freelancers, business owners, gig workers, and contractors who have strong cash flow but might write off a lot on taxes, reducing their reported income.
Eligibility Criteria
Self-employment for at least 2 years
12 to 24 months of consecutive bank statements (business or personal)
A strong average monthly deposit history
A good credit score (typically 620 or higher, though lower may be accepted)
A reasonable debt-to-income (DTI) ratio based on bank statement income
Reserves (savings) to cover a few months of mortgage payments
Pros:
No tax returns or W-2s required
Ideal for self-employed or seasonal income earners
Can qualify for larger loans based on cash flow, not net taxable income
Often faster approval than traditional loans
Flexibility in using personal or business accounts
Cons:
Higher interest rates than conventional loans
May require larger down payments (typically 10–20%)
Not all lenders offer this type of loan
Stricter underwriting around bank activity and consistency
Limited to primary residences, second homes, or investment properties, depending on the lender
Is a Bank Statement Loan Right for You?
If you're self-employed with consistent deposits but struggle to qualify for traditional mortgages due to write-offs or fluctuating income, a Bank Statement Loan could be your path to homeownership or refinancing.
Get a free instant rate quote
Take a first step towards your dream home
Free & non binding
No documents required
No impact on credit score
No hidden costs
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