Being self-employed has plenty of perks, but getting a traditional mortgage usually isn’t one of them. Business write-offs lower your taxable income, which is good at tax time but can make it look like you earn less than you really do. A bank statement loan solves that. Instead of using your tax returns, it uses 12 or 24 months of bank deposits to calculate your income. At Fiesta Home Loans, we work with multiple bank statement mortgage lenders, so we can find the program that fits your business.
What Is a Bank Statement Loan?
A bank statement loan is a mortgage for self-employed borrowers that qualifies you based on the money coming into your accounts, not the income shown on your tax return.
Here’s why that matters. Say your business brings in strong, steady deposits, but after write-offs your tax return shows much less. A traditional lender looks at that lower number. A bank statement lender looks at your actual deposits instead.
How Bank Statement Lenders Calculate Your Income
The process is more straightforward than you might think:
- You provide your bank statements. Most programs use either 12 or 24 months of business or personal statements.
- The lender adds up your eligible deposits. Transfers between your own accounts and one-time deposits usually don’t count.
- A percentage is applied. For business accounts, lenders typically count a set percentage of deposits to account for business expenses. The percentage varies by lender and by the type of business.
- That becomes your qualifying income. The result is the income used to qualify you for the loan.
For example, using round numbers: if your business deposits $120,000 over 12 months and the program counts 50% of deposits, your qualifying income would be about $60,000 a year. This is just an illustration. Each lender uses its own percentages and rules, which is why comparing lenders makes a real difference.
What You'll Typically Need
Requirements vary by program, but most bank statement loans ask for:
- 12 or 24 months of bank statements
- Proof that the account belongs to you or your business
- Proof that you’ve been self-employed for a while, often around two years
- A credit review and property details that meet the program’s guidelines
We’ll confirm the exact requirements for your situation during your consultation.
Other Options for Self-Employed Borrowers
Bank statement loans aren’t the only way for self-employed borrowers to qualify. Depending on how you’re paid and what documents you have, one of these may be a better fit:
- 1099 mortgage loans: For independent contractors who receive 1099 income.
- P&L loans: Qualify using a profit and loss statement for your business.
- DSCR loans: If you’re buying a rental property, you may be able to qualify based on the property’s rental income instead.
Is a Bank Statement Loan Right for You?
A bank statement loan is often a good fit if you:
- Are self-employed or own a business
- Have tax returns that don’t reflect your real income
- Have steady, consistent deposits
- Are buying or refinancing a home
It’s usually not the best option if you earn all your income from a W-2 job, or if you’re buying a rental that could qualify on its rent through a DSCR loan.
Why Work with a Mortgage Broker
Every self-employed mortgage lender calculates income a little differently. One might count a higher percentage of your deposits, or accept 12 months of statements instead of 24. As a broker, we can compare multiple bank statement programs to find the one that shows your income in the best light. Our team is based in Grand Junction and works with self-employed borrowers across Colorado. We’re Latino-owned and bilingual. Hablamos Español.
FAQs
Most programs use either 12 or 24 months of bank statements. Some lenders accept 12 months where others require 24, which is one reason it helps to compare programs.
Most programs accept either business or personal statements. For business accounts, lenders typically count a set percentage of deposits to account for business expenses.
Most programs want proof that you’ve been self-employed for a while, often around two years. We’ll confirm the exact requirement for your situation during your consultation.
Not always. Transfers between your own accounts and one-time deposits usually don’t count. The lender adds up your eligible deposits, then applies its own percentage to calculate your qualifying income.
No. A bank statement loan qualifies you on your deposits. A 1099 loan is for independent contractors who receive 1099 income, and a P&L loan qualifies you using a profit and loss statement. We’ll help you figure out which one fits how you’re paid.
Let's See What You Qualify For
You work hard for your business. Your mortgage should reflect that. Qualify with bank statements by applying online or scheduling a free consultation with our team.
You can also view our loan document checklists to see what you’ll need to get started!
Equal Housing Opportunity. Fiesta Home Loans, Company NMLS #2548599. Alfredo Acevedo, NMLS #772305. Licensed in Colorado, Florida, Idaho, and Texas. This page is general information, not a commitment to lend. Bank statement income calculations vary by lender. No rate, fee, or approval timeline on this page is a quote. Examples use round numbers only.
