Bank Statement Mortgages for Self-Employed Borrowers
Bank statement mortgages let self-employed borrowers, business owners, and 1099 contractors qualify on actual deposit history rather than tax returns. Lenders use 12 or 24 months of personal or business bank statements to compute average qualifying income, then apply standard underwriting from there.
Highlights
- •12 or 24 months of bank statements (personal or business)
- •No tax returns, no W-2s, no DTI from tax-return income
- •Personal accounts: 100% of deposits typically credited
- •Business accounts: deposits adjusted by an expense ratio (often 50%)
- •Up to 90% LTV purchase, 85% LTV cash-out (program-dependent)
Who it's for
Self-employed borrowers whose tax returns underrepresent income due to legitimate write-offs, business owners with strong revenue and high deductions, and 1099 contractors with steady deposit history.
Frequently asked questions
How is qualifying income calculated from bank statements?
Personal accounts: total deposits divided by the number of months (typically 12 or 24). Business accounts: total deposits multiplied by an expense ratio (commonly 50%, sometimes lower with a CPA letter), then divided by months.
How many months of statements do I need?
Most programs offer 12-month and 24-month options. 24-month statements typically get a slightly better rate; 12-month is more flexible if your business is newer.
Can I use both personal and business statements?
Some programs allow combined personal + business with adjusted formulas. If you commingle, lenders may treat the entire account as personal at 100%.
What FICO and LTV apply?
Floor FICO is usually 660; best pricing at 700+. Max LTV is typically 90% on purchase and 85% on cash-out, with reductions for lower FICO or higher loan amount.
Are large deposits a problem?
Yes. Lenders flag and exclude unusual large deposits that don’t look like recurring business revenue. Be ready to source any deposit over a certain threshold (often 25–50% of monthly average).
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Today's mortgage rates
Conventional
5.875%
5.911% APR
FHA
5.250%
5.278% APR
VA
5.250%
5.275% APR
Conv: 80% LTV, 780 FICO. FHA: 96.5% LTV, 680 FICO. VA: 100% LTV, 680 FICO. 30-yr fixed. Your rate may vary.