Bank Statement Loan

Bank statement loans are a type of loan that allows you to get a mortgage without the documents that most loans need to prove your income. We use bank statements to qualify you for a mortgage rather than your tax returns, which are typically required for self-employed borrowers. If your tax returns show a loss, most lenders would turn you away. This is the case even with a profitable Profit & Loss. Lenders can only use the income claimed on your tax returns for qualifying. A bank statement loan bypasses the need for tax returns and instead focuses on the money you bring in monthly to qualify you for a mortgage. It works just like any other loan – you apply for and qualify for the loan and get the funding to buy a home, making your mortgage payments monthly.

Whom Is a Bank Statement Loan Good For?

You may want to use a bank statement loan if you don't have a steady cash flow. They are also good if you can’t get proof of income from an employer. People who might use a bank statement loan could be:

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Consultants & Freelancers

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Small Business Owners

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Doctors & Lawyers

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Real Estate Investors & Agents

Pros of Bank Statement Loans

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No tax returns, W-2s You can get mortgage financing without using your tax returns and/or you've been denied by your bank or credit union.

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You can continue to claim your business write-offs without losing your mortgage eligibility.

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You don’t need perfect credit

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You can buy a home with just 10% down

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A higher debt-to-income ratio may be okay 

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Often have high loan limits

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Often can be used on primary residences, second homes, and investment purchases

Cons of Bank Statement Loans

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May have higher interest rates

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May need a larger down payment

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Not offered by all lenders