Bank Statement Loans

What Is a Bank Statement Loan?

A bank statement loan is a Non-QM mortgage that may use a reviewed history of eligible personal or business account deposits to calculate qualifying income instead of relying only on tax-return income. Statement period, account eligibility, deposit treatment, expense treatment, and supporting documents vary by lender and program.

Bank Statement Program Range at a Glance

• Credit scores as low as 600 on select programs
• Purchase LTV up to 90%
• Cash-out LTV up to 80%
• Income review using 12 or 24 months of eligible deposits on many programs

Program limits vary and may not be available together. Credit, property, occupancy, loan amount, income analysis, reserves, and other requirements apply. A 600 score should not be assumed to receive 90% purchase LTV or any particular terms.

For a self-employed borrower, tax-return income may not tell the same story as recurring business cash flow. A bank statement lender reviews eligible deposits and applies the program’s documentation and expense rules before calculating qualifying income. A conventional loan may still be the better fit when standard documented income supports the request.

Bank statement programs may be available for primary residences, second homes, and investment properties, subject to lender guidelines and property-state availability. Cole personally originates in Florida and North Carolina and can coordinate with an appropriately licensed Mpire Financial originator in other eligible markets.

How Bank Statement Loans Work

Instead of using your adjusted gross income from tax returns, the lender analyzes your bank deposits to determine qualifying income. Here’s the step-by-step process:

Step 1 - Provide statements. You submit 12 or 24 months of consecutive bank statements from either a personal or business account.

Step 2 - Identify eligible deposits. The lender reviews recurring deposits tied to the business or income source. Transfers, duplicate deposits, borrowed funds, and unusual or non-recurring deposits may be excluded or require an explanation.

Step 3 - Apply the program’s expense treatment. Business-statement programs generally account for business expenses through a program-defined factor or a documented expense analysis. Personal-statement programs still require the lender to identify eligible income deposits; not every deposit automatically counts as income.

Step 4 - Calculate reviewed monthly income. The eligible amount after any applicable expense treatment is divided by the statement period.

Step 5 - Complete qualification. The reviewed income is considered with the debt-to-income ratio, credit, assets, property, occupancy, reserves, and all other program requirements.

Hypothetical business-statement calculation:

• Reviewed eligible business deposits over 24 months: $600,000
• Assumed expense factor for this example: 50%
• Remaining amount after the assumed factor: $300,000
• Illustrative monthly qualifying income: $300,000 ÷ 24 = $12,500

This example demonstrates arithmetic only. A lender determines which deposits are eligible, which expense treatment applies, the debts included in DTI, and whether the complete application qualifies.

Personal vs. Business Bank Statements

Personal, business, or combined statements may be considered under different lender programs. Account ownership, deposit source, recurring income and any required expense treatment determine what can count.

Personal Bank Statements

A lender identifies eligible income deposits and excludes transfers, gifts, borrowed funds and other non-income deposits. Select personal-statement programs do not apply a separate business expense factor to eligible deposits.

Business Bank Statements

Business revenue is reviewed with applicable ownership and expense adjustments. Some programs use a standard expense factor; others may accept a documented expense analysis or qualified third-party statement. Gross deposits alone are not qualifying income.

Bank Statement Loan Requirements

Credit Score

Select bank-statement programs are available with credit scores as low as 600. The lender also evaluates credit history, occupancy, property, loan amount, leverage, reserves, income analysis, and other guidelines. The lowest advertised score and highest available LTV may not apply to the same scenario.

Down Payment and Purchase LTV

Select programs offer purchase LTV up to 90%, which corresponds to at least 10% down payment before closing costs and reserves. That maximum should not be assumed at a 600 score. Required equity varies with credit, occupancy, property type, loan amount, documentation, reserves, and lender guidelines.

Months of Statements

Many programs accept 12 or 24 consecutive months. The lender reviews consistency and calculates income over the applicable period; a larger total over more months does not automatically mean higher monthly income.

DTI, Reserves and Business History

Debt-to-income limits, reserves and self-employment history vary by program. The lender reviews income after applicable expense treatment, monthly obligations, available assets and business documentation. Ask which requirements apply to your proposed loan rather than relying on a single universal threshold.

Bank Statement Loan vs. Conventional Loan

Compare both approaches when you can document income conventionally. Pricing and eligibility depend on the complete scenario; alternative documentation does not guarantee a better outcome.

Feature	Bank statements	Conventional
Income review	Eligible deposits with applicable expense treatment	Standard documented qualifying income
Credit	As low as 600 on select programs	Current program and underwriting requirements
Purchase financing	Up to 90% LTV on select programs	Varies by program, occupancy and property
Pricing	Scenario and lender dependent	Scenario and lender dependent

These are separate program limits and may not be available together.

Bank Statement Loans for Jumbo Amounts

Selected bank-statement options extend up to $4 million. Larger loans have their own credit, leverage, documentation and reserve requirements. A given amount of deposits does not establish borrowing power. Review jumbo financing alongside the full income and asset picture.

Bank Statement Loans for Investment Properties

Bank statement loans can finance investment properties, but if you’re specifically looking at rental property financing, compare against a DSCR loan:

• Use bank statement when you want to buy a primary residence, second home, or investment property and your self-employment income supports the debt
• Use DSCR when you’re buying a rental property and want the property’s income to qualify instead of your personal income

For investors who are also self-employed, both products may be available - and we can help you determine which offers the better rate and terms for your specific situation.

How to Apply for a Bank Statement Loan

Step 1 - Gather your statements. Collect 12-24 months of consecutive bank statements from either your personal or business account. Make sure they’re complete (all pages, all months).

Step 2 - Get a CPA letter. Ask your CPA or tax preparer to provide a letter confirming your self-employment status and duration. Some lenders accept a business license instead.

Step 3 - Review your credit profile. Select programs consider scores as low as 600. Available leverage and terms depend on the full application; the lowest score and highest LTV may not combine.

Step 4 - Build a planning estimate. Separate recurring income deposits from transfers and unusual deposits, then apply only a clearly identified program’s expense treatment. The lender’s review determines qualifying income.

Step 5 - Get pre-approved. Book a consultation to review your statements, run the income calculation, and determine your borrowing power.

Step 6 - Find your home, close, and move in. Standard appraisal and closing process from there - typically 30-45 days.

Not sure how much home you can afford? Use our affordability calculator.