Home Loans in 48 StatesARBOR Financial Group · NMLS #236669
Alternative Documentation Loan
A bank statement loan is a mortgage that lets self employed borrowers and business owners qualify using 12 to 24 months of bank statements instead of tax returns. Because lenders look at your actual deposits, you can qualify based on real cash flow and use the loan to buy or refinance a home.
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Call today: 866-521-6488NMLS #236669 · Equal Housing Opportunity · NMLS Consumer Access
12 to 24
Months of bank statements reviewed
24 months
Often gives a stronger, steadier average
10 to 20%
Common down payment range, or more
Bank Statement Basics
Bank statement loans are a mortgage option for self employed borrowers, freelancers, business owners and independent contractors who do not have traditional W2 income. Instead of using tax returns or pay stubs, lenders review your bank deposits from the past 12 to 24 months to estimate qualifying income and decide whether you are eligible for a mortgage.
Bank statement loans suit entrepreneurs, gig workers, real estate investors and high net worth borrowers who have strong cash flow but show lower taxable income because of business deductions. If you have been turned down for a conventional mortgage because of fluctuating income or complex tax returns, a bank statement loan can offer a more flexible path to homeownership.
Lenders verify your income using 12 to 24 months of personal or business bank statements instead of W2s or tax returns. They average your deposits, sometimes applying an expense factor, to estimate monthly income and how much you can borrow. Requirements may include higher credit scores and down payments, but the tradeoff is more flexibility for self employed borrowers.
Bank statement loans can be structured as fixed rate or adjustable rate mortgages. Jumbo bank statement loans are available for higher priced homes, and some lenders offer interest only payment options. You can use these loans for a primary residence, a second home or an investment property, which gives you several ways to finance your plans.
The biggest benefit is flexible income verification, which makes it easier for self employed borrowers to qualify. Bank statement loans can offer higher loan limits, lighter documentation requirements and options for nontraditional income. Lenders may also allow a higher debt to income ratio, recognizing that business owners often have earnings that rise and fall from month to month.
If tax return complications have made traditional mortgage approval difficult, a bank statement loan could be the right solution. It lets you qualify based on your actual cash flow rather than your taxable income. If a traditional loan is possible and cheaper, we will show you that option too, so you can choose with confidence.
These products may have a higher interest rate, more points or more fees than other products requiring documentation.
Why ARBOR
We specialize in helping self employed borrowers secure flexible mortgage solutions using bank statements instead of tax returns. Whether you are a business owner, freelancer or independent contractor, we offer loan programs built around your financial needs.
From prequalification to closing, our team provides personalized service and a clear process, without the roadblocks of traditional income verification.
Ready to explore your options? Talk with ARBOR about a bank statement loan today.
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FAQ
Answers to common questions about bank statement loans, including how lenders calculate income, how many statements you need, down payments, rates and how to prepare clean documentation.
Still have questions?
Talk with a licensed ARBOR loan originator about your bank statement loan options.
866-521-6488[email protected]Browse all mortgage FAQsA bank statement loan is a mortgage that may qualify you using 12 to 24 months of bank statement deposits instead of tax return income. It is designed for borrowers with strong cash flow but complex tax returns, often business owners, freelancers, contractors and commission based earners.
Bank statement loans are often best for self employed borrowers with large write offs, variable income or multiple income streams that are hard to document under standard guidelines. If your business is healthy but your taxable income looks low, a bank statement loan can be a practical path to approval.
Lenders typically review your deposits over a set period, average them and sometimes apply an expense factor to estimate usable income. The details vary by lender, so it helps to choose the program that matches your deposit pattern and keeps the calculation fair.
It depends on the program: some use business statements, some use personal statements and some allow either. If you run expenses through a business account, business statements are common. If income lands in personal accounts, personal statements may work. We choose the cleanest option based on how your money actually moves.
Many bank statement programs use 12 or 24 months of statements, and 24 months often gives a stronger, more stable average. If your income is seasonal, a longer history can help smooth out the average and reduce underwriting questions.
Bank statement loan rates are often higher than traditional conventional loans because the guidelines are more flexible, but pricing varies by borrower and lender. Strong credit, a reasonable down payment, clean statements and documented reserves can help keep your pricing competitive.
Many bank statement programs require a larger down payment than standard conventional loans, often in the 10% to 20% range or more depending on the file. Your credit score, occupancy, property type and loan amount can all change the requirement, so we confirm your exact target early.
Large unexplained deposits, inconsistent cash deposits and transfers with unclear sources can cause underwriting delays or require extra documentation. A clean paper trail matters. If you have one time deposits, we document the source before underwriting asks, so your file stays calm and predictable.
Sometimes, yes. It depends on the lender and program, and investment properties often require a higher down payment and more reserves. If your main goal is investing, we can also compare a bank statement loan with DSCR style options that focus more on the property's cash flow.
The first step is a strategy review of your deposits and accounts, followed by a preapproval plan using the cleanest set of statements and the best fitting program. If a traditional loan is possible and cheaper, we will show you that option too. If a bank statement loan fits best, we structure it to reduce conditions and protect your timeline.
*Important notice: By refinancing your existing loan, your total finance charges may be higher over the life of the loan. The content provided within this website is presented for information purposes only. This is not a commitment to lend or extend credit. Information and/or dates are subject to change without notice. All loans are subject to credit approval. Other restrictions may apply. ARBOR Financial Group is not affiliated with an agency of the federal government, HUD or FHA. THIS IS NOT A GOVERNMENT DOCUMENT. HUD or FHA did not distribute or approve this material.
