Self employed borrowers, as well as those who earn seasonal income, are finally starting to have access to excellent mortgage options.  This includes mortgage products that do not require you to submit any tax returns, but rather allow you to use bank statements to verify your income instead.

As of 2018, there are now numerous banks and mortgage lenders that are offering these bank statement programs.  You can view some of the best lenders below, as well as some general information on how to qualify.

Bank Statement Programs – How to Qualify for a Bank Statement Loan

Below are some of the standard requirements that you should expect from any bank statement program lender.  The exact qualification requirements will vary from one lender to the next.  If you would like some help determining which bank statement lender is likely to offer you the best loan, contact us.

Bank Statements –  You will generally need to submit either 12 or 24 months worth of bank statements.  Depending on the lender, you may be able to use both your personal and business bank statements together as qualifying income.  Most lenders will then take the average of the total income over all 12 or 24 months.

P&L Statement –  Some lenders will require a P&L statement (profit and loss statement) that is prepared by a CPA.  Not all lenders will require a P&L though.  Keep in mind, that when there is no P&L required, often only personal bank statements are eligible to be used.

Down Payment – The maximum LTV allowed is usually 90%, which means a minimum down payment of 10%.  If you have a lower credit score (especially under 580), you should expect to need to put closer to 20% down.

Credit Score –  The credit score requirements vary from lender to another, but it seems that most want at least a 580 FICO score.  However, there as non-prime lenders that offer bank statement programs to borrowers with a credit score as low as 500.  Keep in mind, the lower your credit score, the higher the down payment required will be.

DTI Ratio – Bank statement mortgages allow higher than usual debt-to-income ratios, with nearly each lender allowing a maximum ratio of 50%.  This is higher than conventional and FHA loans, which usually are capped at 43%.  You may also be able to get approved with an even higher ratio if you have sufficient “compensating factors”, such as excellent credit, a higher down payment, or if you have been in business for a long time.

Loan Amount – The maximum loan size that most lenders have is $2 million, but a few lenders will lend all the way up to $3 million.  The minimum loan size is $100,000, so if you want a loan for less than this amount, our lenders will not be able to help you.

These are the basic guidelines required by most lenders offering this type of program.  If you are approved for a bank statement loan, you will receive a loan approval with the exact requirements that must be satisfied in order for your loan to close.

Click here to find out if you qualify for a bank statement loan

Bank Statement Mortgage Lenders

The lenders featured below offer what we consider to be the best bank statement programs.  Depending on your location, we can help match you with the best lender offering this program in your state.  If you would like to be contacted by a lender, simply fill out this form.

Citadel Servicing

North Star Funding

Athas Capital

Mortgage Depot

ACC Mortgage

Angel Oak Mortgage Services

Cross Country Mortgage

Frequently Asked Questions

What types of properties can be bought using this program?
Between all the lenders that offer this program type, nearly all home types are eligible.  This includes primary residences, second homes, investment properties, condominiums, and vacation homes.

What other documents and loan conditions are usually required to obtain the loan?
You should expect to also be required to at least submit a business license and appraisal.

Is it possible to have a W-2 co-borrower?
Yes, you can have a co-borrower who uses their W-2 tax returns and income. They will be verified in a traditional manner, along with your income that is verified through bank statements.

How long does the process usually take to close the loan once approved?
If you move quickly providing everything that is required of you, a 30 day closing time is realistic. However, many loans will take 45 days (and in rare cases even longer) to close due to various reasons.

Do you accept income received through credit card clearing houses?
Yes, income that is received through a credit card clearing house, such as PayPal, AMEX, or Square may be used. All income sources are received on a case by case basis, but as long as the income you receive makes sense for your type of business, you may be able to use income from sources such as PayPal.

I only receive income part of the year (seasonal income), how might I qualify?
If you only receive income for part of the year, you may still qualify for a bank statement loan program. Your total income will be averaged out for either 12 or 24 months, so as long as the monthly average meets the necessary income requirements for your loan, you may qualify.

Can you use retirement income for these programs?
Any retirement income that is deposited into your bank account can be used as qualifying income.

Will having any NSF (non sufficient funds) or overdrafts on my bank account affect my chances of qualifying?
Some lenders will only allow you to have up to 3 total NSF / overdrafts on your account in a 12 month period. You may receive an exception, but it will ultimately be up to the underwriter to decide.