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For high-income, self-employed borrowers, bank statement mortgages remain one of the most powerful tools for financing in 2025. But one strategic question can significantly impact both your loan terms and total savings:
Should you choose 12-month or 24-month bank statement underwriting?
This article breaks down both options, compares them in real-world terms, and helps you decide which one gives you the edge—especially if you’re an entrepreneur, consultant, or freelancer with fluctuating income.
What Is Bank Statement Underwriting?
Bank statement underwriting is an alternative documentation method used by non-QM lenders. Instead of relying on tax returns or W-2s, lenders use your personal or business bank statements to verify income. This approach is designed for:
- Business owners
- High-income 1099 earners
- Gig workers and independent contractors
- Self-employed professionals in industries with tax write-offs
Learn the full breakdown in our guide: What Is a Bank Statement Mortgage and Who Qualifies?
12-Month vs 24-Month Bank Statement Underwriting: Key Differences
| Feature | 12-Month Underwriting | 24-Month Underwriting |
| Income Calculation | Based on 12 most recent months | Based on 24 months average |
| Ideal for | Recent income spikes | Consistent or growing earners |
| Rate Qualification | May have slightly higher rate | Often more favorable rates |
| Documentation Required | Fewer months of statements | Longer history required |
| Approval Flexibility | Useful when recent income is up | Smoother for consistent earners |
Which Option Saves High-Income Borrowers More?
It depends on your income pattern and loan goals. Here are the most common borrower scenarios:
Scenario 1: Recent Surge in Income
If your income has recently jumped—say your business exploded over the past 12 months—then 12-month underwriting allows you to leverage that growth without averaging in lower prior income.
Example:
- 2023 income: $120K
- 2024 income: $240K
- 12-month average: $20K/month → qualifies for larger loan
Best for: Rapid growth-phase entrepreneurs, consultants landing high-paying contracts, influencers or creators with new monetization success.
Scenario 2: Stable or Slightly Fluctuating Income
If your income has been steady or had dips and surges, 24-month underwriting offers more flexibility. Many lenders view this as lower risk, often translating into better interest rates and smoother approvals.
Example:
- 2023: $240K
- 2024: $240K
- 24-month average: $20K/month → same result, possibly better terms
Best for: Seasoned business owners, real estate professionals, or borrowers with a multi-year income track record.
How Lenders Evaluate 12- vs 24-Month Bank Statement Loans
Lenders will look at:
- Total gross deposits
- Consistency of deposits
- Business expense factor (typically 50% unless verified lower)
- Seasonality of income
- Any red flags (large, irregular, or unverified deposits)
Pro tip: Some lenders allow a CPA-prepared Profit & Loss (P&L) statement to reduce expense assumptions—boosting your qualifying income.
Get matched with lenders offering 12- and 24-month programs
How to Choose the Right Option for You
- Audit Your Income Trends
Pull both your 12- and 24-month bank statements. Identify which period gives you a stronger monthly average. - Consult a Specialist
A mortgage expert who understands self-employed underwriting can help model both scenarios. - Consider Your Timeline
If you need to close quickly, 12-month underwriting may reduce paperwork and speed up approval.
Need help choosing the best underwriting option? Request a free income analysis.
FAQs About 12- vs 24-Month Bank Statement Loans
Will I qualify for a better rate with a 24-month statement?
In many cases, yes. Lenders see more history as less risky, which can lead to more favorable pricing.
Can I switch from 12 to 24 months during the application process?
It depends on the lender, but yes—if both are available, you may switch based on what gives you better results.
Do both require the same credit score?
Generally yes. A 660+ FICO is preferred, though rates improve with scores over 700.
Read Next:
- Bank Statement Mortgages for Six-Figure Entrepreneurs: 2025 Playbook
- DSCR vs Bank Statement Loans: Which Is Better for Investors?
- How to Qualify for a Non-QM Mortgage in 2025
Final Thoughts
Choosing between 12- and 24-month bank statement underwriting could mean thousands of dollars in savings—or frustration and delays. Evaluate your recent income, compare lender offers, and work with an expert who can guide you toward the smartest option.
Want to find out which option saves you the most?
Run your income scenario now and get pre-qualified with no credit impact.
Talk to a mortgage advisor who specializes in bank statement loans. Book a strategy call today.
Get Expert Financing
- Matched with investor-friendly lenders
- Fast pre-approvals-no W2s required
- Financing options fro rentals, BRRRR, STRs
- Scale your portfolio with confidence
Our advice is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.
