Bank Statement Loans for Self-Employed Borrowers
Self-employed income doesn’t usually fit in a neat box. If you own a business, your tax return likely shows less income than the cash actually flowing through your business. That’s not necessarily a problem, but it can make it harder to qualify for a mortgage.
A bank statement loan looks at your deposits instead. It’s one of several ways I qualify self-employed borrowers across Bell County and Central Texas, and it’s usually the first thing I check when a good business owner has been turned down somewhere else.
★★★★★ 5-Star Client Reviews • Mortgage Loan Officer with Fairway Home Mortgage | Brazos Group • Salado, TX
What is a bank statement loan?
It’s a mortgage that qualifies you on money coming into your bank account rather than the income line on your tax return. Instead of W-2s and pay stubs, you hand me twelve or twenty-four months of statements. We total the deposits, apply an expense factor to account for the cost of running your business, and use that figure as your qualifying income.
It sits in a category called Non-QM, which simply means the loan doesn’t follow the standard Fannie Mae and Freddie Mac rulebook. Non-QM is not subprime and it is not a last resort. It’s a different set of rules built for people whose finances are real but don’t fit a form.
Bank Statement Loan Calculator
See your qualifying income and max loan amount — on bank statements, not tax returns.
Over the last 24 months. Leave out transfers between your own accounts, loans, refunds, and cash.
Debts: minimum payments on car loans, cards, student loans, and other mortgages. Not rent.
Adjust taxes, insurance & HOA
How to read these numbers. This calculator produces a hypothetical illustration, not a loan offer. To estimate a loan amount, it assumes an interest rate of 8.000% on a 30-year fixed term and a 43% debt-to-income ratio. That rate is an assumption only. It is not an Annual Percentage Rate (APR), not a rate quote, and not a rate available to any particular borrower. Your actual rate and APR are set during underwriting based on your complete file and will differ. Down payment and loan-amount figures are illustrative, not terms offered to you. Nothing here is a rate quote, a pre-qualification, a commitment to lend, or an advertisement of currently available terms. All loans are subject to credit, income, asset, and property approval. Guidelines are subject to change without notice. Not all applicants will qualify. Information entered here is not stored or transmitted.
David Laws, Loan Officer, NMLS #2794754. Fairway Independent Mortgage Corporation, NMLS #2289. Equal Housing Opportunity.
Who these loans are actually for
In my experience around Salado, Temple, Belton, & North Austin, the people who need this most are:
- Contractors, electricians, plumbers, and trades business owners
- Restaurant and retail owners with strong revenue and heavy write-offs
- 1099 consultants, realtors, and commissioned salespeople
- Gig and platform workers with steady deposits and no employer
- Owners who just took a big equipment or vehicle deduction
- Anyone who has been told no because their adjusted gross income looked too low
The pattern is almost always the same. The business is healthy. The bank account is healthy. The tax return is doing exactly what a good CPA designed it to do, and it happens to make you look poorer than you are.
What you’ll need
- Twelve or twenty-four months of personal or business bank statements
- Generally two years of self-employment history in the same line of work
- A letter from your CPA or tax preparer confirming your business expenses and your status as an independent contractor
- Proof of your business license, if your trade requires one
- Enough cash or liquid assets to cover several months of payments
- Statements for other accounts — a 401(k), brokerage, or similar
- Credit history, typically held to a higher standard than conventional or FHA
- No tax returns, W-2s, pay stubs, or employment verification
The exception you need to know about
The two-year rule isn’t always absolute. Sometimes we can consider a borrower who has been self-employed for around twelve months if they have two or more years of documented work history in the same industry beforehand. The electrician who spent six years on someone else’s crew and then went out on his own is exactly the profile this exception was written for.
If you’re in year one, don’t assume you’re out. Call me and let’s see whether your history supports it.
If you’ve had a credit event
A past foreclosure, bankruptcy, short sale, or deed-in-lieu doesn’t disqualify you, but it does start a clock. Most programs want to see a couple of years since the event, and some want considerably longer. It varies enough by lender that it’s worth asking rather than assuming; the answer for one program is often different from the next.
The honest tradeoffs
I’d rather you hear this from me now than find out at the closing table.
The rate is often higher than a conventional loan. The lender is taking on more risk with less documentation and prices accordingly. How much higher depends on your credit, your down payment, and the market that week.
The down payment is usually larger. More than a conventional or FHA loan would ask for. The exact figure depends on your credit profile and the property.
Underwriting reads your statements closely. Large irregular deposits, transfers between accounts, and overdrafts all get questioned. Clean, boring statements move fastest.
It isn’t always the right answer. Sometimes a borrower comes to me convinced they need a bank statement loan, we run the conventional numbers, and conventional wins. That’s a good outcome, and I’ll tell you when it happens.
One more thing worth planning around: a bank statement loan today doesn’t lock you in forever. If your returns strengthen over the next couple of years, refinancing into conventional financing is often on the table.
If a bank statement loan isn’t the fit
It’s one tool. Depending on how your income is structured, one of these may serve you better:
Asset depletion loans
Converts savings, retirement, and investment balances into qualifying income. This is often the answer for retirees, or for a business owner who sold and is sitting on proceeds. Learn more about Asset loans→
DSCR loans
For rental property. Qualifies on whether the property’s rent covers its own payment, leaving your personal income out of it entirely. Learn more about DSCR loans→
Conventional, done carefully
Worth a real look before anything else. Add-backs for depreciation, amortization, and one-time expenses can raise your usable income more than most people expect. This is where I start.
Let’s look at your actual numbers
Send me twelve months of statements and I’ll tell you what we can work with. No application and no credit pull to have that conversation. If conventional turns out to be the better deal, I’ll tell you that too.
I’m David Laws, a mortgage loan officer based in Salado, working with self-employed buyers across Temple, Belton, North Austin, & Bell County.
Program availability, guidelines and requirements vary by lender and are subject to change without notice. This is not a commitment to lend. All loans are subject to credit and property approval. Not all applicants will qualify. Information on this page is for educational purposes only.