A bank statement loan qualifies you on deposits, not tax returns — ideal when write-offs shrink your taxable income. Below: the basics, the income math, costs, and process. For exact thresholds see Requirements; to estimate a payment, use the calculator.
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The basics
What is a bank statement loan?
A non-QM mortgage that qualifies you on 12–24 months of bank deposits instead of tax returns — so business write-offs don't hold down your income. See the overview.
Who is it for?
Self-employed borrowers, business owners, 1099 contractors, freelancers, gig workers, commission earners, and investors. See Eligibility.
Do I need tax returns?
No — deposits document income. Some lenders request returns for verification only, not to qualify you.
Is this a "stated income" loan?
No. It's fully documented — you prove income with statements. True stated-income loans disappeared after 2008.
Do I have to be self-employed?
Mostly yes, plus commission and business-owner income. W-2 earners usually get cheaper conventional loans.
How long must I be self-employed?
~2 years in the same field; sometimes 12 months with strong compensating factors.
Income & the expense factor
How is my income calculated?
Eligible deposits over 12–24 months are totaled and divided by the months. Transfers and non-income items are removed.
What is the expense factor?
A percentage (~50%) applied to business-account deposits for operating costs. A CPA letter can lower it and raise your income.
Can a CPA letter really increase my income?
Yes — if it documents that your true expenses run below ~50%, your qualifying income rises. Often the single most valuable document in the file.
12 or 24 months of statements?
24-mo often prices better/allows higher LTV; 12-mo suits a recent increase or newer business.
Personal or business statements?
Both work — personal for sole proprietors, business for higher volume (with the expense factor). Sometimes combined.
What if my deposits swing month to month?
Averaging over 12–24 months smooths variation. Big unexplained deposits should be documented (sale, transfer, etc.).
Cost, credit & down payment
What are the rates in 2026?
~0.75–2% above conventional, by credit/down/reserves/statement period. Narrows with strong credit and 20%+ down. See Rates.
What credit score do I need?
~620–640 floor; 700+ for best pricing and higher LTV.
How much down payment?
10–20% primary (up to 90% LTV well-qualified), 20–25% investment.
Is there mortgage insurance?
None at any LTV — which offsets part of the higher rate vs low-down conventional with PMI.
How much in reserves?
3–6 months typical (6–12 for higher LTV/lower credit). Retirement/investment accounts usually count.
Are gift funds allowed?
Generally yes for a primary residence; usually not for investment properties.
Property, process & refinancing
Can I buy an investment property or second home?
Yes — primary, second, or investment, 1–4 unit residential. Investors may also compare DSCR.
How long does it take to close?
Most bank statement loans close in 21–30 days with clean documentation.
Can I refinance with a bank statement loan?
Yes — rate-and-term or cash-out. And you can later refinance out to conventional once documented income supports it.
Are interest-only or 40-year options available?
Often yes — useful for cash-flow flexibility, especially for investors and high-income borrowers.
Reviewed by the licensing team 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.