Bank Statement Loans
Your tax returns say one thing.
Your bank account says another.
If you own a business, you probably pay a good accountant to keep your taxable income low. That’s smart in April and a problem when you apply for a mortgage, because a conventional lender qualifies you on the income your returns show. A bank statement loan qualifies you on the eligible deposits your business actually makes, adjusted under the program’s rules.
Who this is for
Business owners, independent contractors, consultants, commission-based salespeople, physicians and dentists in private practice, real estate agents, and anyone paid on a 1099 who has generally been self-employed for at least two years. It’s the loan for the borrower who makes plenty of money and can’t prove it the way a W-2 employee can.
How it works
Instead of tax returns, the underwriter reviews 12 or 24 months of bank statements, personal or business. Deposits are totaled and then adjusted: transfers between your own accounts, loan proceeds, and other non-income deposits are excluded. If the statements are from a business account, an expense factor is applied to reflect what it costs to run the business, so qualifying income is lower than gross deposits. The result is a monthly income figure the underwriter can use, built from what you actually took in rather than what you reported.
What to expect
A bank statement loan is generally a non-QM loan. Non-QM loans generally are not eligible for purchase or guarantee by Fannie Mae or Freddie Mac and are not government-insured or guaranteed. Down payment requirements are typically higher than a conventional loan, credit and reserve requirements still apply, and terms differ from what you’d see on a conforming loan. In exchange, eligible cash flow can support qualification. We’ll tell you up front which statements to send securely, what will and won’t count, and whether 12 months or 24 months gives you the better result, before you’ve committed to anything.
Questions we hear most
The details matter.
Let’s talk through them.
- Can I use business statements if the business has other owners?
- Often yes, with documentation of your ownership percentage. Requirements vary by program.
- Do large one-time deposits count?
- Usually they’re excluded or need a paper trail.
- What if I’ve been self-employed less than two years?
- Some programs allow it with prior experience in the same field; it depends on the file.
- Can I combine bank statement income with a spouse’s W-2 income?
- Yes, in most programs, subject to documentation and underwriting.
Not sure if you’d qualify? That’s what the Second Look is for.
You’ll be paired with the loan originator licensed in your state. Alabama loans are originated by Aubrea McNamara, NMLS #1842646.
Program availability, documentation requirements, and terms vary by state and investor and change over time. Nothing on this page is a commitment to lend or a guarantee of approval. All loans subject to credit and property approval. Canopy Mortgage, LLC, NMLS #1359687. Equal Housing Opportunity.