top of page

Bank Statement Loans: The Ultimate Guide For Self-Employed Borrowers

Updated: Nov 30

Bank Statement Loans: The Ultimate Guide For Self-Employed Borrowers

Journeying through the landscape of mortgage loans while self-employed can sometimes feel like climbing an unending mountain. Trust us, we get it - standard home loan stipulations often leave a significant number of self-employed applicants feeling sidelined.

But fear not! This article unravels one impressive alternative: bank statement loans, an ideal solution for those finding it difficult to fit into the traditional loan mold. Come along as we delve into how these loans function, their pros and cons, and how they could pave your path toward homeownership!

Key Takeaways

Bank statement loans are mortgage loans designed for self-employed borrowers who may not have traditional income documentation.

These loans allow borrowers to use their personal or business bank statements as proof of income instead.

Bank statement programs offer greater flexibility in income verification compared to traditional home loans. Self employed individuals, freelancers, independent contractors, and business owners are eligible for bank statement loans.

Quick Navigation - Click the link below to jump to that section..

  1. What are Bank Statement Loans?

  2. Who is Eligible for A Bank Statement Loan?

  3. Benefits and Drawbacks of Bank Statement Mortgage Loan

  4. How to Secure a Bank Statement Mortgage

  5. Conclusion

  6. FAQ's

What are Bank Statement Loans?

What are Bank Statement Loans?

Bank statement loans are mortgage loans specifically designed for self-employed borrowers, freelancers, independent contractors, and business owners who may not have traditional income documentation, such as W-2 forms or tax returns, to qualify for a conventional home loan.

These loans allow borrowers to use their personal or business bank statements as proof of income instead.

Definition and purpose

Bank statement loans, often known as non-qualified mortgage loans, present a viable financial solution for self-employed borrowers. These unique loan options have primarily been designed to cater to the needs of those who find it challenging to verify income through traditional means such as tax returns.

By providing several months' worth of bank statements, self-employed individuals demonstrate their ability to repay the loan without requiring conventional proof of income. The overarching purpose of these loans is to enable more accessible homeownership opportunities for self-employed professionals, retirees, and business owners whose real earnings may not be accurately depicted in their tax returns.

Comparison with traditional home loans

Bank statement programs offer a different approach to securing home financing compared to traditional home loans. We've compiled a simple table below to highlight the key differences between these two types of loans.

Bank statement loans have emerged as a robust alternative to traditional home loans, and they have become popular for borrowers who cannot verify their income through traditional methods.

Who is Eligible for A Bank Statement Loan?

Who is Eligible for A Bank Statement Loan?

Self-employed borrowers, freelancers and independent contractors, as well as business owners, are eligible for a bank statement program.

Self-employed borrowers

Self-employed borrowers, this is for you! Are inconsistent income patterns or lack of traditional employment documentation making your mortgage application process challenging? Bank statement loans come to the rescue.

These non-qualified mortgages don't rely on tax returns and W2s. Instead, they allow us to leverage our bank statements as proof of income. This type of loan provides an excellent opportunity for business owners, independent contractors, and freelancers alike - anyone who may not have "typical" wage-earning jobs but has a steady cash flow visible through their bank accounts.

As self-employed individuals ourselves, we've felt the frustrations that can come with trying to secure a home loan in a system primarily set up for traditionally employed people—no more worries though; banks now offer these unique programs tailored just for us.

With bank statement loans becoming increasingly popular among self-employed borrowers like us, it's time we capitalize on this opportunity and achieve our real estate dreams!

Freelancers and independent contractors

Freelancers and independent contractors are eligible for Bank Statement Loans. As a freelancer or independent contractor, you can use your personal or business bank statements to qualify for a mortgage loan. This means that you won't need to rely solely on tax returns or other conventional methods of proving your income.

Bank Statement Loans offer greater flexibility and give you the opportunity to secure the financing you need to purchase a home or refinance an existing one. So, if you're self-employed, consider exploring this option as it could be the perfect fit for your unique financial situation.

Business owners

Business owners, including self-employed individuals, can greatly benefit from bank statement loans. Instead, business owners can use their personal or business bank statements to prove their ability to repay the loan. This flexibility allows business owners with fluctuating income or unique financial situations to qualify for a mortgage based on their bank statements rather than relying solely on conventional loan requirements.

Additionally, bank statement loans typically require a minimum down payment and may require several months of PITI reserves in the bank. So if you're a business owner looking to secure a mortgage, consider exploring the options provided by bank statement loans.

Remember, these loans offer greater flexibility and can be an excellent choice for business owners who are self-employed or have irregular income streams. With the help of an experienced broker like Bennett Capital Partners, you can navigate through the approval process smoothly and find a suitable bank statement loan program tailored to your specific needs as a business owner.

Benefits and Drawbacks of Bank Statement Mortgage Loan

Benefits and Drawbacks of Bank Statement Mortgage Loan

Bank statement loans offer several advantages for self-employed borrowers. This is especially beneficial for those who have fluctuating incomes or may not have traditional tax returns to prove their earnings. Additionally, bank statement loans can be a great option for borrowers with less-than-perfect credit since they focus more on the ability to repay the loan rather than credit scores.

However, there are potential drawbacks and considerations when it comes to bank statement mortgage loans. These types of loans often come with higher interest rates compared to traditional mortgages, as they are considered riskier by lenders.

It's important for self-employed individuals considering a bank statement loan to carefully evaluate their financial situation and weigh the pros and cons before proceeding. Working with an experienced mortgage broker or lender specializing in these types of mortgage loans.

How to Secure a Bank Statement Mortgage

How to Secure a Bank Statement Mortgage

To secure a Bank Statement Mortgage, begin by gathering all the required documents such as bank statements and financial records. Understand your financial position and work with a reputable mortgage lender like Bennett Capital Partners to get pre-approved for the loan.

Then, navigate through the approval process and apply for the mortgage. Don't forget to get a real-time quick quote from Bennett Capital Partners to compare rates and terms.

Gather required documents

To secure a bank statement mortgage, you'll need to gather the following documents:

📌 Personal bank statements: Provide several months' worth of personal bank statements to show your income and financial stability.

📌 Business bank statements: If you're a business owner or self-employed, provide several months' worth of business bank statements to demonstrate your business income.

📌 Tax returns: While bank statement loans don't require tax returns for proof of income, some lenders may still ask for them as part of the application process.

📌 Identification documents: Prepare copies of your driver's license, passport, or other identification documents to verify your identity.

📌 Proof of assets: Gather documentation that shows any other assets you may have, such as investment accounts or real estate holdings.

📌 Credit history: Be ready to provide information about your credit history, including credit scores and any outstanding debts or loans.

Get Pre-Approved With Bennett Capital Partners

We can help you get pre-approved for a bank statement mortgage loan here at Bennett Capital Partners. As experts in the field, we understand the unique challenges that self-employed borrowers face when it comes to securing financing.

With our knowledge and experience, we can guide you through the process of getting pre-approved, ensuring that your application is strong and increases your chances of approval. Let us help you navigate this important step toward obtaining the mortgage you need for your dream home or investment property.

➡️ Click here to start the pre-approval and application process

Apply and navigate the approval process

To secure a Bank Statement Mortgage, follow these steps to apply and navigate the approval process:

Complete the pre-approval process by submitting your application and necessary financial documents.

Collect and provide all required documentation, including bank statements, tax returns, and proof of income and assets.

Work with a mortgage broker experienced in bank statement loans, like Bennett Capital Partners.

Understand your financial position - analyze your debt-to-income ratio and credit score to determine if any improvements are needed.

Get pre-approved with Bennett Capital Partners - this will give you an idea of how much you can borrow and what interest rates you may qualify for.

Bennett Capital Partners submits your application to the lender and be prepared to provide any additional documentation or information as requested during underwriting.

Conditional approval is given - this means that final approval is contingent upon satisfying specific conditions set by the lender.

Bennett Capital Partners processes the loan application and collects the loan conditions on your behalf.

The mortgage loan is approved in underwriting and a Final Approval is given.

Once you receive final approval, review all terms of the loan including interest rates, fees, and repayment terms before proceeding.

Close on your loan - sign all necessary paperwork, pay any closing costs, and take ownership of your new property.

Get A Real-Time Quick Quote From Bennett Capital Partners

To get a real-time quick quote from Bennett Capital Partners, simply provide your information and financial details to their team of experts. They will assess your situation and provide you with an accurate quote tailored to your needs as a self-employed borrower.

This streamlined process allows you to quickly and easily determine the loan amount and interest rates that you qualify for. Take advantage of this convenient service to take the next steps in securing a bank statement mortgage loan.



In conclusion, bank statement loans offer self-employed borrowers a flexible and alternative option for obtaining home financing. With the ability to qualify based on bank statements rather than tax returns, these loans allow individuals to access the mortgage they need without the traditional income verification requirements.

Whether you're a business owner, freelancer, or independent contractor, bank statement loans provide an opportunity for homeownership that may not be available through conventional mortgage options.

Explore this loan program with Bennett Capital Partners and unlock the possibilities for your self-employed mortgage journey.

Key Terms and Important Concepts

Navigating the mortgage landscape can be challenging, especially for those who are self-employed or have unconventional income streams. Bank statement loans for self-employed individuals offer a unique solution. Unlike traditional mortgage programs, bank statement mortgage loan programs allow you to use bank statements instead of traditional income verification methods to get a mortgage loan.

To qualify for a bank statement loan, lenders typically require 12 months of bank statements or, in some cases, months of business bank statements. These statements help lenders verify your bank statements and assess your ability to repay the loan. The type of mortgage loan you can get based on this method is often more flexible but may have different bank statement loan mortgage rates compared to best mortgage rates in standard programs.

Bank statement loans are considered riskier by some lenders because they are considered non-QM loans, which means they don't meet the typical qualifications for a mortgage. However, they are an excellent option for self-employed borrowers, especially self-employed borrowers who are 1099 contractors. These loans can help self-employed individuals get approved for a loan even when applying for a traditional mortgage might be challenging.

Lenders who offer bank statement loans usually require a thorough review of your financial history. Your eligibility is based on your bank statements, and lenders use these bank statements to determine your income. Some lenders even offer a bank statement loan as a specific product tailored for those who can't qualify for bank statement loans through traditional means.

The income loan you can get through this program is determined by your average deposits over the required months of bank statements. This is different from how you would get a mortgage using bank statements in more traditional settings, where your income would be verified through W-2 forms or pay stubs.

Bank statement home loans are a viable alternative for those who may not have a steady paycheck but have a consistent income stream as verified by their bank statements. They are often the candidates for bank statement loans because they can't provide the standard documentation required by traditional mortgage programs.

Bank statement loan might be your best option if you're a business owner or freelancer looking to find bank statement loans. However, it's essential to compare bank statement mortgage loan rates to ensure you're getting the best deal.

If you're considering this type of mortgage loan, it's crucial to consult with professionals who can guide you through the intricacies of non-QM loans that can use bank statements as a form of income verification.

By understanding these key terms and concepts, you'll be better prepared to navigate the complexities of bank statement loans, whether you're a first-time homebuyer or a seasoned investor.


What is a bank statement loan?

A bank statement loan is a type of non-QM mortgage where the lender uses your recent bank statements instead of tax returns to determine your income.

How do bank statement loans work for self-employed borrowers?

For many self-employed borrowers, a bank statement loan allows them to qualify based on 12 months' worth of business bank statements rather than ordinary income documents or tax returns.

Where can I find a bank statement loan?

You could get this type of mortgage from lenders who offer non-QM loans, these include some banks and various other lending institutions that have special programs for the self-employed mortgage seekers.

Are there different types of bank statement loans?

Yes, there are different types such as personal or business-bank-statement loans which require either 12 or 24 months worth of either personal or business banking transactions respectively.

Is it difficult for self-employed workers to get conventional loans?

It might be challenging because traditional conforming loans require regular income proof which not all self-employed individuals can provide; thus making them excellent candidates for alternate solutions like the Bank Statement Loans.

Can you explain why my banker referred me to Non-Qm Loan options even though I own my own successful business?

Due to irregularities in reporting earnings typical with 1099 earners, qualifying conventionally becomes tough hence most financial advisors recommend exploring alternative Non-qualified mortgages (Non-qm) such as Bank Statement Loans.

Philip Bennett

Philip Bennett

Philip is the owner and Licensed Mortgage Broker at Bennett Capital Partners, Bus. NMLS # 2046828. He earned his degree in Accounting and Finance from Binghamton University and holds a Master's Degree in Finance from NOVA Southeastern University. With more than 20 years of experience, Philip has been a leader in the mortgage industry. He has personally originated over $2 billion in residential and commercial mortgages.

Learn more about Philip Bennett's background and experience on our Founder's page. Whether you're a first-time homebuyer or a seasoned real estate investor, our team is here to help you achieve your real estate goals. Don't wait any longer, contact us today and let us help you find the right mortgage for your needs.

Discover helpful tips and tricks on mortgages by reading our blog posts


Related Posts

See All

Finance & Mortgage Blog

Mortgage Market Insights: The Latest Updates and Expert Analysis

Latest Posts

bottom of page