- Qualify using 12 or 24 months of bank deposits — no W-2s or tax returns required
- Ideal for self-employed borrowers whose tax returns understate their true income
- Rates are typically 0.5–1.5% higher than conventional — a worthwhile tradeoff for many borrowers
- Down payments from 10% available with strong credit
- Loans up to $3 million+ available through First Colony Mortgage
- Must be self-employed for 2+ years in the same industry
A bank statement loan is a Non-QM mortgage that qualifies self-employed borrowers using 12 or 24 months of personal or business bank deposits — no W-2s, pay stubsor tax returns required. Income is calculated from average monthly deposits, adjusted by an expense factor based on business type. Rates are typically 0.5–1.5% higher than conventional mortgages.
If you're self-employed, a business owner, freelanceror 1099 contractor, you already know the frustration: your tax returns don't reflect your actual income. That's exactly why bank statement loans exist — and why Dustin Carlson has helped hundreds of self-employed borrowers use them to close on their dream homes.
What Is a Bank Statement Loan?
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A bank statement loan (also called a Non-QM or stated-income mortgage) qualifies borrowers based on bank deposits rather than W-2s or tax returns. Lenders analyze 12 or 24 months of your personal or business bank statements to determine your qualifying income.
These are full-documentation loans — just not traditional documentation. You're providing real proof of income; it's just measured differently than a W-2 employee's pay stubs.
Who Benefits from Bank Statement Loans?
- Self-employed business owners who write off significant expenses, lowering taxable income
- Independent contractors and 1099 workers (consultants, realtors, financial advisors)
- Gig economy workers (Uber, Airbnb, freelancers)
- Entrepreneurs with multiple income streams
- Seasonal workers with variable income patterns
💡 The Classic Problem: A business owner earns $200,000/year in revenue but shows $40,000 in net taxable income after deductions. Conventional lenders see $40,000. A bank statement lender sees $200,000 in deposits. That difference determines whether you can buy a home.
How Bank Statement Loans Work
The process depends on whether you're using personal or business bank statements:
Personal Bank Statements (12 or 24 months)
Total deposits are averaged over the statement period. This works best when your business income flows directly into a personal account.
Business Bank Statements (12 or 24 months)
Total deposits are calculated, then an expense factor is applied to estimate net income. Typical expense factors range from 10–50% depending on the business type. For example, a consulting firm might use a 10% expense factor (assuming 90% of revenue is income), while a retail business might use 50%.
| Business Type | Typical Expense Factor | Effective Income Used |
|---|---|---|
| Professional Services (consulting, legal, medical) | 10–20% | 80–90% of deposits |
| Technology / Software | 15–25% | 75–85% of deposits |
| Wholesale / Distribution | 40–50% | 50–60% of deposits |
| Retail / Restaurant | 45–55% | 45–55% of deposits |
Bank Statement Loan Requirements in 2026
- Self-employment duration: 2+ years in the same business/field
- Credit score: 620+ (lower scores may qualify with larger down payment)
- Down payment: 10–20% typically; less available at higher credit scores
- Loan amounts: Up to $3M+ available through First Colony Mortgage
- Property types: Primary residence, second home, investment property
- Reserves: Typically 3–12 months of payments in the bank after closing
Rates and Terms
Bank statement loan rates are typically 0.5–1.5% higher than conventional rates, reflecting the additional flexibility and non-traditional documentation. On a $600,000 loan, that's approximately $200–$500 more per month compared to conventional — a cost many self-employed borrowers gladly pay to qualify at all.
As your business grows and your tax returns begin to reflect your true income, you can refinance into conventional financing at lower rates.
Self-Employed? Let's Find Your Path to Homeownership
Dustin specializes in bank statement loans and Non-QM financing for business owners and self-employed borrowers. He'll review your bank statements confidentially and tell you exactly what you qualify for — with no commitment required.
Get My Bank Statement Loan Analysis →Dustin Carlson NMLS #193009 · First Colony Mortgage Corporation NMLS #3112