By Mike Basti, President and Mortgage Broker · NMLS #322904 · Updated You send 12 consecutive months of statements. The lender removes deposits that aren't income, averages the rest, and applies an expense factor (commonly 50%) if they're business statements. Personal statements usually count at or near 100% of eligible deposits. Typical terms: 640+ credit, 10% down with 700+ credit (15–20% otherwise), 20–25% down on investment property, loans up to $3 million. A 12-month window works best when your income has grown in the last year.
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How the 12-month calculation works
The underwriter reads 12 consecutive monthly statements, every page. Anything that isn't earned income comes out: transfers between your own accounts, loan proceeds, refunds, gifts and one-time sales like a car. What's left is added up and divided by 12. That monthly average is your starting income.
Total eligible deposits
Twelve months of business income, minus anything that isn't income.
Divide by 12
That's your average monthly deposit figure.
Apply the expense factor (business accounts only)
Commonly 50%. A CPA letter showing lower real costs can bring it down. Personal accounts usually skip this step.
Check the trend
If the last few months are clearly lower than the average, many underwriters use the lower figure.
12 vs 24 months: which gives you more income?
The only thing that changes is how far back the average reaches. If your business grew last year, 12 months leaves the slower year out. If last year had a slow stretch, 24 months spreads it out.
| 12-month program | 24-month program | |
|---|---|---|
| Statements needed | 12 consecutive months | 24 consecutive months |
| Best when | Income grew in the last year | Income is steady, seasonal, or had a recent dip |
| Pricing | Can carry a small adjustment at some lenders | Can earn slightly better pricing |
| Max loan-to-value | Sometimes a little lower | Sometimes a little higher |
| Paperwork | Half the statements | Twice the statements to explain |
| Time in business | Usually 2 years either way; some programs accept 1 year in the same field | |
We run both windows on every file before you pick one. For the full side-by-side, see the 12 vs. 24 month guide.
Personal vs business accounts on a 12-month loan
You can use 12 months of either account. They're counted differently:
| Personal statements | Business statements | |
|---|---|---|
| How deposits count | Usually 100% of eligible deposits | Deposits minus an expense factor (commonly 50%) |
| Works best when | You pay yourself a steady draw | You leave most money in the business |
| Can you lower the haircut? | No haircut to lower | Yes, with a CPA letter or a low-overhead business |
| Extra paperwork | Some lenders also want 2 months of business statements to trace the draws | Proof of ownership; income is limited to your ownership share |
Example: $40,000 a month of business deposits at a 50% factor qualifies at $20,000. If you transfer $22,000 a month to your personal account, personal statements qualify at $22,000. If your CPA documents a 30% expense ratio, business statements qualify at $28,000 and win. More detail: personal vs business bank statement loans.
Credit, down payment and loan limits
A 12-month file is underwritten to the same credit and down payment rules as any bank statement loan. Credit and down payment move together:
| Credit score | Typical minimum down (primary home) | Pricing |
|---|---|---|
| 700+ | 10% | Best tiers |
| 660–699 | 15% | Strong |
| 640–659 | 20% | Program-dependent |
| Item | Typical range (October 2026) |
|---|---|
| Minimum credit score | 640; pricing improves at 660 and again at 700+ |
| Down payment, primary home | 10% with ~700+ credit; 15–20% with lower scores or larger loans |
| Down payment, investment property | 20–25% |
| Cash-out refinance | Up to about 75% loan-to-value |
| Loan amount | Up to $3,000,000 ($5,000,000 by exception) |
| Reserves | Often 3–6 months of payments, more on larger loans |
| Debt-to-income | Up to ~45%, some programs to 50% with conditions |
| Mortgage insurance | None at any loan-to-value |
| Property types | Primary, second home, 1–4 unit investment |
Some programs we work with go further on strong files: up to 90% loan-to-value on a primary purchase and expense factors as low as 15% with qualifying third-party documentation. Full details are on the requirements page.
Who a 12-month bank statement loan fits, and who it doesn't
- Good fit: income grew this year, a new contract or location started paying, or you want less paperwork.
- Good fit: you're on a tax extension and don't have a current return yet.
- Consider 24 months: your last 12 months include a slow stretch, or a strong season fell just outside the window.
- Consider other programs: if your tax returns already show enough income, a conventional loan is usually cheaper. Buying a rental that covers its own payment? A DSCR loan uses no personal income.
12-month bank statement loan FAQs
What is a 12-month bank statement loan?
A 12-month bank statement loan is a non-QM mortgage that qualifies self-employed borrowers on the average of their last 12 months of personal or business bank deposits instead of tax returns or W-2s. It still follows the federal Ability-to-Repay rule and normal credit, asset and appraisal standards.
Is 12 months or 24 months of bank statements better?
Twelve months is usually better when your income grew in the last year, because older, lower months drop out of the average. Twenty-four months is better when income is steady or seasonal, or when the last year had a slow stretch, and it can earn slightly better pricing. We calculate both before you choose.
How is income calculated on a 12-month bank statement loan?
The lender removes deposits that are not income, such as transfers between your accounts, loan proceeds and refunds, adds up the rest and divides by 12. Business-account deposits then get an expense factor, commonly 50%. Personal-account deposits are usually counted at 100%.
Do personal bank statements count at 100%?
Usually yes. Eligible deposits into a personal account are typically counted in full because the money has already left the business. Some lenders also ask for two months of business statements to confirm where the personal deposits come from.
What credit score do I need for a 12-month bank statement loan?
Most programs start at 640. Pricing improves at 660 and again at 700 and above, and around 700+ is usually what allows 10% down on a primary home.
How much down payment does a 12-month bank statement loan need?
Typically 10% on a primary home with credit around 700 or higher, 15–20% with lower scores or larger loans, and 20–25% on an investment property. Cash-out refinances generally go up to about 75% loan-to-value.
What is the maximum loan amount?
Save Financial arranges 12-month bank statement loans up to $3 million, and up to $5 million by exception on strong files.
Can I get a 12-month bank statement loan with one year of self-employment?
Sometimes. Most lenders still want two years in business even on a 12-month program. Some accept one year if you worked in the same field before going out on your own and the rest of the file is strong.
Do I need tax returns?
No. Your deposits document your income. Some lenders have you sign IRS Form 4506-C as a standard fraud check, but your returns are not used to calculate qualifying income. Most lenders do want a CPA or tax-preparer letter confirming you are self-employed.
How long does a 12-month bank statement loan take to close?
About 21 days on average from a full application when the statements are complete, and 30 days on most files. Missing pages, unexplained deposits and waiting on the CPA letter cause most delays.
Terms shown are typical ranges as of October 2026 and vary by lender, credit, down payment and property. Reviewed by Mike Basti at Save Financial, a California-licensed mortgage brokerage (NMLS #377740, DRE #01875766) founded in 2009 and serving all 58 counties from offices in Newport Beach and Marina del Rey.