Write-offs are great at tax time and painful at mortgage time. A bank statement loan qualifies you on what actually hits your accounts.

How income is calculated

The lender reviews 12 or 24 months of personal or business bank statements. Business accounts usually get an expense factor applied (or your actual expense ratio from a CPA letter or P&L), and the result becomes your qualifying income.

What lenders usually want

  • About two years of self-employment, verified by a business license, CPA letter or similar.
  • Credit that fits the program; the best leverage generally starts around 700 to 740.
  • A down payment or equity, often 10% to 25%, and some cash reserves.

On select programs, primary-home bank statement purchases go up to 90% loan-to-value with 740+ credit and loans up to $1,000,000.

The trade-off

Rates and costs run higher than conventional loans. Many of my clients use a bank statement loan to buy now, then refinance to conventional after a year or two of tax returns that show more income.

Other alternative-doc options

1099-only, profit-and-loss only, asset-based qualifying and written verification of employment are available on select programs too.

Examples are for illustration only. Not a rate quote, a credit decision or a commitment to lend. Programs, terms and timelines vary by lender, property and borrower and are subject to approval. Larz Martin NMLS #2026245, Lumin Lending, Inc. NMLS #2716106. Equal Housing Opportunity.