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Manny Oloyede | NMLS 1824463

Loan program · Specialty

Bank Statement Mortgages

Self employed borrowers often write off significant business expenses, which lowers the net income used on a traditional loan. Bank statement programs qualify income using deposits over a 12 or 24 month period with an expense factor applied, instead of using tax return net income.

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Guidance by Manny

Who it is designed for

  • Business owners with strong deposits but heavy write offs
  • 1099 contractors and commission earners
  • Self employed borrowers whose tax returns understate cash flow
  • Self employed homeowners refinancing or taking cash out

Eligible occupancy types

  • Primary residence
  • Second home
  • Investment property

Down payment or equity

Down payment requirements are set by the investor and are generally higher than agency financing, scaled by credit score and loan amount.

Major benefits

  • Income calculated from deposits rather than net tax return income
  • 12 or 24 month options depending on the program
  • Purchase, rate and term, and cash out structures available

Important considerations

  • Pricing is typically higher than conventional financing
  • Deposits must be consistent and traceable to the business
  • Transfers between accounts and non business deposits are usually excluded
  • Business ownership seasoning is required

How qualification generally works

  • 12 or 24 months of business or personal bank statements
  • Proof of self employment such as a business license or CPA letter
  • Credit and reserves reviewed under the investor's tiers
  • Appraisal on the subject property

Documents commonly requested

  • 12 or 24 consecutive months of bank statements for the qualifying account
  • Business license, operating agreement or CPA letter confirming ownership and time in business
  • Photo ID and Social Security number
  • Mortgage, tax and insurance details on real estate owned

Not sure this is the right mortgage?

Tell Manny what you're trying to accomplish. He can help you compare this program with other financing options that may fit your situation — your income and how it is documented, your credit and assets, the property and how you will use it, your timeline, and the guidelines that apply. Most borrowers have more than one workable path.

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Frequently Asked Questions

Bank statement programs are designed to qualify income from deposits rather than tax return net income. Some investors still ask for supporting documentation of business ownership, but the income calculation is deposit based.

Qualifying deposits over the review period are totaled, non business deposits and transfers are removed, and an expense factor is applied to estimate net income. The factor may come from your CPA, the program's default, or your business type.

Yes. Bank statement programs are available for rate and term and cash out refinances on eligible properties, not only for purchases.

Qualifying deposits over the review period are totaled, non business deposits are excluded, an expense factor or documented profit and loss is applied, and the result is averaged monthly.

Both are commonly accepted. Business statements usually have an expense factor applied, while personal statements may be used when business income is deposited there.

Not on these programs. That is the point of the structure, though other documentation such as a business license and a profit and loss statement is often requested.

Yes on eligible programs, with equity requirements that are typically higher than full documentation financing.

Commonly twelve or twenty four months of statements, plus proof of self employment, asset statements and property documentation.

Related programs and next steps

Investment

DSCR Loans

Investment property financing qualified on rent, not personal income.

Learn more Specialty

No DTI and Asset Acquisition Mortgage

Qualify using verified assets rather than monthly income.

Learn more Core

Jumbo Loans

Financing above conforming loan limits for higher priced homes.

Learn more

Considering bank statement mortgages?

We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.

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