My Perfect Mortgage
How to Achieve Home Ownership Through Bank Statement Mortgages
6 minute read
April 29, 2024

Are you in the market for a new home but struggling to secure a traditional mortgage? Does your irregular income pattern feel like a roadblock in your path to homeownership? You're not alone. Many self-employed professionals, contract workers, and business owners face the same hurdles. And here's the silver lining: bank statement mortgages.

Finding an alternative way to demonstrate your financial capabilities can be a game-changer in home financing. 

At, our goal is to help you through this less-traveled yet incredibly effective route to reach your home owning dreams.

In this article, we'll dive deep into this little-known avenue of bank statement mortgages that could spell the difference between your present struggle and your future home.

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Unlocking the Mystery: What Are Bank Statement Mortgages?

Bank statement mortgages are unconventional loans designed in particular for self-employed individuals and business owners.

This loan works best for those who may not meet traditional loan criteria due to irregular income or unconventional means of income documentation.

This unique type of mortgage loan utilizes your bank statements to verify income instead of relying on typical W-2 tax documents or pay stubs.

With a bank statement mortgage, self-employed individuals can secure a loan using their business revenue as the primary qualifying factor. This approach can result in larger loan amounts than might typically be available with conventional mortgage options.

Flexible Financing Solution

The beauty of a bank statement mortgage lies in its flexibility. Perhaps your tax returns do not reflect a true picture of your income. Or maybe your income isn't documented traditionally, making other loan types inaccessible.

A bank statement mortgage provides an alternative pathway to homeownership where your business earnings directly influence your investing potential.

Bank Statement Mortgages Vs. Traditional Mortgages

Securing a traditional mortgage often hinges on W-2 forms and standardized income verification, posing a hurdle for self-employed individuals, freelancers, and gig economy participants.

Their income streams may fluctuate, or they might have substantial tax write-offs that don't accurately reflect their earning potential. This is where bank statement loans emerge as a game-changer.

These specialized loan programs, offered by progressive lenders, cater specifically to the needs of the self-employed.

Unlike traditional mortgages, bank statement loans rely on personal or business bank statements to assess income.

This alternative verification method proves particularly beneficial for those with:

  • Variable Income: Fluctuating income streams, common among freelancers and contract workers, can make traditional mortgage approval difficult. Bank statement loans consider a broader income picture over a set period, providing a more holistic view of your financial health.
  • Significant Tax Write-Offs: Self-employed individuals often leverage tax deductions to minimize their tax burden. However, these deductions can make traditional income verification methods misleading. Bank statement loans bypass this issue by focusing on actual deposits into your accounts.

Potential Trade-Offs:

It's important to acknowledge that there might be slight drawbacks to bank statement loans.

While they provide a valuable alternative for the self-employed, they may come with slightly higher interest rates compared to government-backed or conforming loans.

Overall, bank statement loans offer a crucial bridge for self-employed individuals and the dream of homeownership.

They eliminate the roadblocks posed by traditional verification methods, paving the way for a more inclusive and accessible path to owning a home.

Bank Statement MortgageTraditional Mortgage
Income verified via bank statementsIncome verified via pay stubs and tax returns
Ideal for self-employed individualsIdeal for salaried or waged individuals
Potentially larger loan amount based on business revenueLoan amount based on salary or wage income
Increased approval chances for irregular incomeReliable and stable income favored

The Criteria: How to Qualify for a Bank Statement Mortgage

Let's put the facts on the table: qualifying for a bank statement mortgage is not as daunting as it sounds.

Requirements often include a good credit score, a solid down payment, and, of course, your bank statements.

These statements essentially serve as proof of income, demonstrating valid, consistent cash flow. But is that it?

Mortgage RequirementsDescription
Down paymentThis is the upfront amount you pay towards your home purchase. Typically, lenders require anywhere between 3-20% of the home’s purchase price. Higher down payments can lead to better rates and less stringent requirements.
Credit scoreYour credit score impacts loan approval, interest rates, and loan terms. Many lenders require a minimum credit score of 620 for conventional loans, but specific requirements can vary. A higher score can reduce interest rates and potentially lower monthly payments.
Bank StatementsBank statements give lenders a glimpse into your financial health, showing regular income deposits, cash flow, and ensuring there's enough money for down payment and monthly mortgage payments. Typically, the past 2 years of bank statements are required.
Profit and Loss StatementThis financial document can be crucial in the case of self-employed individuals. It shows the revenue, costs, and expenses over a period. This can demonstrate the financial stability of your business.
Reserve RequirementsLenders may require you to keep a certain amount of money in reserve after closing on your loan. This is to ensure that you can to continue making your mortgage payments, even if an unexpected expense arises.

Why Bank Statements Matter for Your Mortgage Application

For self-employed borrowers, traditional mortgage applications can be tricky due to income verification. Bank statement loans offer an alternative, but lenders still need to assess your financial health.

Here's what they'll be looking for in your bank statements:

  • Positive Account Balance: A healthy balance demonstrates responsible financial management.
  • Regular Income Deposits: Consistent deposits showcase reliable income flow.
  • Down Payment and Mortgage Payment Capacity: Lenders want to see if your bank statements can support the down payment and ongoing mortgage obligations. Ideally, seasoned deposits (held for at least 2 months) strengthen your application.
  • Debt-to-Income Ratio (DTI): Lenders assess the portion of your income used for debt payments (including the proposed mortgage). A DTI below 50% generally indicates good financial standing.
  • Profit and Loss Statement: This crucial document provides a comprehensive view of your business's financial health including its revenues, costs, and expenses during a designated period.

Who Benefits from Bank Statement Loans?

Bank statement loans are ideal for self-employed individuals or those with income not reflected accurately on tax returns. If your income is variable or you utilize significant tax write-offs, bank statements can offer a clearer picture of your financial situation to lenders.

Personalized Mortgage Solutions: How Makes the Difference

Are you seeking a personalized approach to unlock your dream of homeownership? Look no further than

We comprehend the unique challenges faced by self-employed individuals and business owners when it comes to traditional mortgage options.

Our solution? A ground-breaking platform that places the power of securing a bank statement mortgage directly in your hands.

We provide you with the freedom to choose from trusted lenders with a little bit of our guidance. At, we make the process smooth and seamless.

In conclusion, securing a bank statement mortgage need not be an intimidating process.

By partnering with, you gain expert guidance, faster approvals, and personalized mortgage solutions tailored for self-employed applicants like you.

Start your journey towards financial empowerment and homeownership today.

Our advise 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.