Self-employed? Qualify on what you actually make.

What is a bank statement loan?

A bank statement loan lets self-employed borrowers qualify using their bank deposits instead of tax returns. The lender reviews months of personal or business bank statements and calculates income from deposits, adjusted for business expenses. It's a non-QM loan, built for people whose write-offs make their tax returns look smaller than their real income.

Who is it for?

Business owners, freelancers, 1099 contractors, and other self-employed borrowers whose tax returns understate what they earn. If your CPA does a good job lowering your taxable income, a traditional loan may approve you for less than you can afford. A bank statement loan looks at the money actually coming in.

• Business owners and LLC members
• Contractors, owner-operators, and tradespeople
• Realtors, consultants, and other commission or 1099 earners
• Borrowers with strong deposits but heavy write-offs

How is income calculated?

Lenders typically average your eligible deposits over a set period of months, then apply an expense factor for business statements. Transfers between your own accounts and one-time deposits are usually excluded. Some lenders accept a CPA-prepared expense ratio or a profit-and-loss statement. The exact method depends on the lender's program.

Which statement period and expense method fits best depends on how your business runs. Send me a quick description and I'll tell you which approach makes sense for you.

What do I need to qualify?

Expect the lender to look at how long you've been self-employed, your credit, your down payment or equity, your reserves, and the property. Requirements vary by lender and change often, so I'll match your file to the program that fits instead of guessing. A short conversation tells you where you stand.

• Your business history: how long you've been self-employed and how steady your deposits are.
• Your credit: stronger credit generally opens more options.
• Your down payment or equity: more skin in the game can help.
• The property: what it is and how you'll use it.
• Where it is: I help self-employed borrowers in Texas and Tennessee.

Can I buy, refinance, or take cash out?

Bank statement programs generally cover purchases, rate-and-term refinances, and cash-out refinances. In Texas, a cash-out on your homestead still has to follow Section 50(a)(6), including the total-lien limit and the 12-day wait. I'll tell you which options fit your situation.

Read: Texas cash-out rules

What does it cost compared to a conventional loan?

Bank statement loans are non-QM programs and may carry higher rates and costs than conventional or FHA financing. The trade-off is qualifying on the income you actually earn. If you might qualify for a conventional loan with your tax returns, I'll tell you, and we'll compare both on real Loan Estimates.

What should I gather?

Start with your recent personal and business bank statements, proof of how long you've been in business, and a list of your debts and assets. Don't move money between accounts or make large unexplained deposits right before applying without asking me first. Clean statements make for a faster file.

• Recent bank statements (all pages)
• Business license, CPA letter, or other proof of self-employment
• Photo ID
• Info on the home you're buying or refinancing

Bank statement loans are non-QM programs and may carry higher rates and costs than conventional financing. Lender guidelines vary and change often. For illustration only. Not a commitment to lend, a Loan Estimate, or an offer of credit. Your actual figures depend on your full application, credit approval, property, and the loan program. John Stafford NMLS #2470539 | GoRascalJohn powered by GoRascal Inc. NMLS #2072896. Equal Housing Opportunity.