Loans / Bank Statement Loans
Bank Statement Loans
for Self-Employed Borrowers
A bank statement loan is a mortgage that qualifies self-employed borrowers using 12 or 24 months of personal or business bank deposits instead of tax returns. The lender calculates income from your deposits, so the write-offs that lower your taxable income do not lower your approval.
Reviewed by Kevin Danowitz, NMLS #924478
Last updated [date]
At a glance
Minimum credit
620
Minimum down
10%
Tax returns
Not required
Time to close
About 30 days
Who is a bank statement loan for?
Business owners, 1099 contractors, freelancers and commission earners whose tax returns understate what they actually earn. There is no minimum time in business. If you recently moved from W-2 work to running your own company in the same field, you may still qualify.
How does a bank statement loan work?
Step 1
Send 12 or 24 months of personal or business bank statements.
Step 2
The lender totals eligible deposits and turns them into a monthly qualifying income. Business accounts count 50% to 90% of gross deposits. Transfers between your own accounts do not count.
Step 3
Credit, down payment and reserves are reviewed the same way as any mortgage.
Step 4
As a broker, HP Mortgage submits your file to the wholesale non-QM lender whose guidelines fit it best, rather than one bank's single program.
Step 5
Appraisal, final approval and closing, typically in about 30 days.
What are the bank statement loan requirements?
| Requirement | HP Mortgage program |
|---|---|
| Statements | 12 or 24 months, personal or business |
| Income calculation | Personal accounts up to 100% of deposits. Business accounts 50% to 90% of gross deposits |
| Minimum credit score | 620 |
| Minimum down payment | 10% |
| Maximum loan-to-value | Up to 90% with no mortgage insurance |
| Time self-employed | No minimum |
| Tax returns and IRS transcripts | Not required |
| P&L-only option | Available instead of statements, 660 minimum score |
| Fully stated option | Available with no bank statements, for purchase or refinance |
| Second-position cash-out | Fixed second or HELOC, available in every state we serve, including Texas |
| Typical time to close | About 30 days |
Licensed by the California Department of Financial Protection and Innovation, Florida Office of Financial Regulation, New Jersey Department of Banking and Insurance, Pennsylvania Department of Banking and Securities, Texas Department of Savings and Mortgage Lending, and Virginia State Corporation Commission.
Real borrower examples
12-Month Bank Statement Loan
Self-employed for one year, after a year as a W-2 employee in the same line of work. Purchase.
Credit
660
Down
20%
24-Month Bank Statement Loan
In business more than two years. Purchase.
Credit
720
Down
10%
P&L Loan
Deposits into the business account were inconsistent, so HP Mortgage connected the borrower with an accountant who prepared a P&L to document the income.
Credit
720
Down
15%
How does a bank statement loan compare to other options?
| Option | What proves income | Best for |
|---|---|---|
| Conventional (full doc) | Two years of tax returns and W-2s or 1099s | Borrowers whose returns show full income |
| Bank statement loan | 12 or 24 months of deposits | Self-employed borrowers with heavy write-offs |
| P&L-only loan | Profit and loss statement | Owners with strong books but irregular deposits |
| Fully stated | No statements or returns | Borrowers who cannot document income the other ways |
| Asset depletion | Liquid assets converted into monthly income | Retirees and high-asset borrowers with little income |
| DSCR loan | The property's rent | Investment properties |
Frequently asked questions
Do I need tax returns for a bank statement loan?
No. Qualifying income comes from your bank deposits. Tax returns and IRS transcripts are not required.
Can I use business bank statements?
Yes. Business accounts count 50% to 90% of gross deposits as income, depending on the lender and your business. Personal accounts can count up to 100%.
How long do I need to be self-employed?
There is no set minimum. A borrower with one year in business, after a year of W-2 work in the same field, can qualify.
Are bank statement loan rates higher?
Usually somewhat. The gap depends on credit, down payment and property type, and pricing changes daily, so HP Mortgage quotes your actual file instead of advertising teaser rates.
Can I take cash out without refinancing my low-rate first mortgage?
Yes. A bank statement second-position loan or HELOC lets you pull equity and keep your existing first mortgage, including in Texas.
How fast can a bank statement loan close?
About 30 days on average, like any other mortgage.
Reviewed by
Kevin Danowitz
Founder, HP Mortgage LLC · NMLS #924478
In mortgage lending since 2003, starting as a loan officer at Chase Manhattan. Founded HP Mortgage in 2015 to place self-employed and non-QM borrowers the big banks turn away. Consistently one of the top-producing brokers with his wholesale lenders since 2017.