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A Bank Statement Loan is a type of mortgage designed for self-employed individuals, freelancers, and business owners who may not have traditional income documentation like W-2s or pay stubs. Instead of verifying income through tax returns, lenders use 12 to 24 months of personal or business bank statements to determine your income.
These loans are ideal for borrowers with strong cash flow but high tax write-offs that reduce reported income on paper.
How It Works
Instead of tax returns, lenders review:
Monthly bank deposits (typically averaging income over 12–24 months)
Business expense ratios
Consistency and source of income
The loan process also includes credit checks and standard property appraisals.
Who’s Eligible?
You may qualify if you:
Are self-employed (usually for 2+ years)
Have consistent deposits shown in bank statements
Meet minimum credit score requirements (often 620+)
Can provide other financial documentation if needed
Pros:
Great for self-employed or gig workers
No tax returns or W-2s required
Flexibility in income verification
Can qualify with strong cash flow, even with high write-offs
Cons:
Higher interest rates than conventional loans
Larger down payment typically required (10–20%)
Not offered by all lenders
May include additional fees or stricter lending terms
Bank Statement Loans offer a path to homeownership for those who earn well but don’t fit the traditional borrower mold. If you’re self-employed and your tax returns don’t reflect your real income, this loan could be the right fit.
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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