Quick answer
A bank statement mortgage is a first mortgage for self-employed borrowers that calculates your income from 12 months of bank deposits instead of tax returns. In our program you can qualify with a credit score as low as 640 and borrow up to 80% of the home’s value, so plan on at least 20% down or 20% equity. It is a non-QM loan, so the rate is usually higher than a conventional mortgage; the trade is that write-offs on your tax return no longer hold you back. Terms shown are examples, not a commitment to lend.
What is a bank statement mortgage?
A bank statement mortgage is a first mortgage, used to buy a home or refinance one, where the lender works out your income from your bank deposits rather than your tax returns. It belongs to a group called non-QM loans: mortgages that sit outside the standard rules for conventional, FHA and VA loans because they document income differently.
It is not a “no-doc” loan. Your credit, identity, assets, the property and the existence of your business are all still verified. What changes is the proof of income: statements replace the two years of tax returns a conventional lender would ask for.
How lenders turn deposits into income
The lender adds up qualifying deposits over the statement period and averages them into a monthly figure. How that average is treated depends on the type of account:
- Business statements. Deposits pay for business costs too, so lenders apply an expense factor to estimate what is left as income. A letter from your CPA or tax preparer can sometimes support a lower expense figure if your margins are high.
- Personal statements. If your business pays you into a personal account, those deposits can be used more directly, as long as they trace back to the business.
- What gets excluded. Transfers between your own accounts, loan proceeds, refunds and one-time unusual deposits usually do not count. Large deposits may need a short explanation.
Our program uses 12 months of statements. For a closer look at what underwriters check in those months, see how many months of bank statements you need for a mortgage.
Requirements at a glance
| Requirement | Our bank statement program |
|---|---|
| Income documentation | 12 months of bank statements |
| Minimum credit score | 640 |
| Maximum loan-to-value | Up to 80% (at least 20% down or 20% equity) |
| Loan purpose | Purchase or refinance |
| Tax returns | Not used to calculate income |
Examples only. Reserves, property type, loan size and occupancy can change the final terms. A written quote shows the exact terms for your situation.
Who a bank statement mortgage fits
- Business owners who write off a lot. Deductions that save you tax also shrink the income a conventional lender can count.
- 1099 contractors and freelancers with steady deposits but uneven tax-return income.
- Growing businesses whose last 12 months look much stronger than the last two tax years.
- Buyers and owners with real equity or a solid down payment. With an 80% maximum loan-to-value, you need at least 20% in the deal.
If your tax returns already show enough income, a conventional loan is usually cheaper and worth checking first. As both a lender and a broker, I can price both and show you the difference.
What it costs compared with a conventional loan
Expect a higher rate than a conventional mortgage. The lender is taking on a loan without tax returns, and non-QM loans are not sold to the government-sponsored agencies, so they are priced differently. The biggest drivers of your rate are your credit score, your loan-to-value, the loan size, the property type and your reserves.
The full breakdown, including when a conventional loan wins, is in bank statement mortgage rates vs. conventional.
Already own your home? Compare a HELOC
If you like your current mortgage rate and only need cash, refinancing the whole loan may not make sense. A bank statement HELOC uses the same kind of income documentation but leaves your first mortgage alone. The HELOC vs. cash-out refinance guide walks through that decision.
How the process works
- Quick review. Share your goal, the property and a rough idea of your monthly deposits.
- Upload 12 months of statements. We calculate qualifying income and flag anything an underwriter will ask about.
- Written quote. You see the rate, costs and cash needed before you commit.
- Appraisal, underwriting and closing. Similar to any mortgage, with the statements standing in for tax returns.
FAQ
Can I get a mortgage without tax returns?
Yes. A bank statement mortgage calculates your income from 12 months of bank deposits instead of tax returns. Your credit, assets, the property and your business are still verified.
What credit score do I need for a bank statement mortgage?
Our program considers credit scores down to 640. Higher scores generally get better pricing.
How much do I need to put down?
Our maximum loan-to-value is 80%, so plan on at least 20% down on a purchase, or at least 20% equity on a refinance.
Are bank statement mortgage rates higher?
Usually, yes. It is a non-QM loan, so it is typically priced above a conventional mortgage. If your tax returns show enough income, compare a conventional quote too.
Can I use a bank statement loan to refinance?
Yes. The program covers both purchases and refinances, up to 80% loan-to-value.
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Keep reading
Bank Statement HELOC
Tap equity on bank statements and keep your current first mortgage.
How Many Months of Bank Statements Do You Need?
What underwriters look for in your statements and how to prepare.
Bank Statement Mortgage Rates vs. Conventional
What drives the price difference and when conventional wins.