Let’s talk about a loan most people do not realize exists: the bank statement loan.

As a mortgage professional, I work with many self-employed borrowers and business owners who earn solid income but run into trouble qualifying for a traditional mortgage. The issue usually is not affordability. It is documentation.

That is where the bank statement loan comes in.

A bank statement loan is a Non-QM mortgage option designed for borrowers with nontraditional income. Instead of using W-2s or tax returns, we qualify income using 12 or 24 months of bank statement deposits. This allows us to focus on cash flow rather than taxable income after write-offs.

This program works especially well for self-employed individuals who legitimately reduce their taxable income through business expenses. While that strategy makes sense for taxes, it can create challenges with conventional loan guidelines. Bank statement loans offer a more realistic view of earning power.

The process is straightforward. We review your bank statements, average the deposits, and apply an expense factor when needed to determine qualifying income. Depending on the program, personal or business statements can be used. These loans are available for purchases and refinances and may be used for primary homes, second homes, and in some cases investment properties.

Bank statement loans typically require higher credit scores and carry slightly higher interest rates than traditional loans. However, for many borrowers, the ability to qualify without restructuring their business or waiting years outweighs the difference.

A common misconception is that these loans are risky or a last resort. In reality, they are designed for borrowers with strong, consistent income who simply do not fit into a traditional lending box.

Not all bank statement loans are the same, and how the loan is structured matters. This is why working with a lender who understands these programs is key.

If you are self-employed, earn 1099 income, or own a business and have been told you do not qualify for a mortgage, this option may be worth exploring.

If you would like a full breakdown of how bank statement loans work and whether one makes sense for your situation, book a call with me or reach out directly. I am always happy to walk through the numbers and provide clear guidance.

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