Self-employed
Bank Statement
For self-employed borrowers. Qualify using bank statements instead of traditional pay stubs.
A bank statement loan lets self-employed borrowers qualify using the deposits in their bank statements instead of tax returns. If you’re a business owner, your tax return often shows a much lower income than you actually bring in, because of write-offs. A bank statement loan looks at your real cash flow instead.
Who it’s a good fit for
- Business owners and independent contractors
- 1099 earners, freelancers and gig workers
- Real estate agents, consultants and other commission-based professionals
- Anyone whose tax returns understate what they really earn
How it works
- You provide 12 or 24 months of bank statements, personal or business, depending on the program.
- The lender adds up your eligible deposits.
- For business accounts, an expense factor is applied to account for business costs, or your actual expense ratio is used.
- The result becomes your monthly qualifying income.
Most programs want to see about two years of self-employment history. Some also ask for a letter from your CPA or proof your business is active.
What else lenders look for
- A solid credit score
- A down payment, often 10% or more
- Reserves after closing
Bank statement loans can be used to buy or refinance a primary home, a second home or an investment property.
Things to weigh
Bank statement loans are specialty programs, so pricing differs from a conventional loan. If your tax returns already show enough income, a conventional loan will usually cost less. We’ll look at both before you decide.
Common questions
Personal or business statements?
Either can work, depending on the program. Business statements usually have an expense factor applied.
Do I need tax returns at all?
Usually not for income. You may still need to show your business license or a CPA letter.
Can I do a cash-out refinance?
Yes, many programs allow it.
Self-employed and tired of hearing “your taxes don’t show enough”? Call us at 303-931-3239, or get prequalified online.