What is a Bank Statement Loan?

A Bank Statement Loan is a mortgage solution designed for self-employed borrowers, entrepreneurs, and business owners who use bank statements instead of tax returns to verify income. This flexible loan option provides a clear path forward with competitive terms and tailored conditions for non-traditional earners.

Bank statement loans offer flexible income verification by using 12–24 months of bank deposits instead of W-2s or tax returns, making them ideal for self-employed, freelancers, or business owners with fluctuating incomes or significant business deductions.

Key benefits include access to homeownership for non-traditional earners, potentially lower down payments, faster processing times due to less documentation, and the ability to qualify based on actual cash flow rather than taxable income.

These loans also provide access to more property types and may feature higher loan limits, though they may come with slightly higher interest rates to offset lender risk due to less documentation requirements.

• Flexible Income Verification: Allows self-employed individuals and freelancers to qualify using bank statements instead of traditional tax returns or W-2s.
• Captures True Income: Reflects actual cash flow and revenue, often more accurate than taxable income for those who take business deductions.
• Increased Accessibility: Opens homeownership opportunities for borrowers who don't fit the traditional lending box due to fluctuating or complex income.
• Faster Processing: Less documentation and streamlined processes often result in faster approvals compared to traditional mortgages.
• Potential for Lower Down Payments: Some programs allow for as little as 10% or even 5%, depending on the lender and program.
• Use for Various Properties: Can be used for primary residences, second homes, and investment properties.

- Billy Watkins - Sr Mortgage Broker - NMLS 384700