Bank Statement Loans

Self-employed individuals or those with non-traditional income sources often face challenges in providing the standard proof of income required for conventional mortgages.

Bank statement loans allow these individuals to access financing based on bank deposits rather than tax returns or pay stubs that don’t accurately reflect their true income.

How does a bank statement loan work?

Instead of traditional income verification documents, applicants are required to submit a specified number of recent bank statements.

Lenders assess the average monthly income based on the bank statements provided.

Bank statement loan requirements

Loan approval depends on a borrower’s ability to provide the following:

12-24 months of bank statements
Credit score of at least 620 (but higher will help you access better rates and terms)
Down payment of at least 10%
Debt-to-income (DTI) ratio established by lender
Loan-to-value (LTV) ratio established by lender

Bank Statement Loan FAQs

Are bank statement loans hard to get?

Bank statement loans are designed to be more flexible in assessing income, making them accessible for self-employed individuals or those with non-traditional income sources.

What are the interest rates for bank statement loans?

Bank statement loan interest rates generally are about 2% higher than conventional mortgage rates, depending on other qualification factors.

Adjustable-rate loans can bring down your payment.

How many months of bank statements do you need for a loan?

Your lender generally will want to see 12-24 months of a borrower’s most recent bank statements to assess their income, expenses, and overall financial stability.

How long does it take to get a bank statement loan?

Getting approved for a bank statement loan may be faster than with a conventional mortgage because income verification is more streamlined.

Flexible financing using nontraditional income