BANK STATEMENT LOANS
A Flexible Mortgage Option for Self-Employed Borrowers
Business deductions can lower your taxable income. That can make it harder to qualify for a traditional mortgage, even when your business has steady cash flow.
A bank statement loan offers an alternative way to document qualifying income. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
The lender may use eligible deposits in your personal or business bank statements to calculate qualifying income.
At Platinum Lending Solutions, we work with multiple mortgage lenders offering bank statement mortgage programs for qualified borrowers in Oregon and Washington.
1
Review Statements
Personal or business bank statements may be reviewed over a specified period.
2
Analyze Deposits
Eligible deposits and applicable business expenses may be analyzed.
3
Establish Qualifying Income
The lender uses the program’s calculation method to determine qualifying income.
What Is a Bank Statement Loan?
A bank statement loan is a non-QM mortgage for eligible self-employed borrowers. It may help when tax returns do not show enough income to qualify through traditional underwriting.
The lender may review personal or business bank statements over a period set by the loan program. It uses eligible deposits and applicable business expenses to calculate the income that can count toward qualification.
Program requirements vary by lender, property type, occupancy, credit profile and other factors.
Bank statement loans are one of several specialized mortgage loan options available for borrowers with nontraditional income documentation.
Alternative Documentation — Not No Documentation
A bank statement loan isn’t a way to avoid documenting income.
You still need to document your income. The lender uses a different method to calculate how much income can count toward the loan.
Bank Statement Loan Programs May Be Available For
Primary Residences
Second Homes
Home Purchases
Who May Benefit From a Bank Statement Mortgage?
This option may be worth considering if you are self-employed and have steady cash flow, but cannot qualify using your tax-return income.
Business & Professional
• Business owners
• Independent contractors
• Consultants
• Freelancers
Other Self-Employed Borrowers
• Real estate professionals
• Commission-based self-employed borrowers
• Other borrowers with established self-employment income
How Do Bank Statement Loans Work?
The lender reviews deposits over the statement period required by the program. Not every deposit counts as income.
For business statements, the lender may apply an expense factor to account for business costs. Some programs accept other ways to document those expenses.
The calculation varies by program. The same statements may therefore support different qualifying income with different lenders.
Bank Statement Loan Requirements
There is no single set of requirements that applies to every bank statement mortgage.
Bank statement mortgages are generally considered non-QM loans. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation. Equity requirements and underwriting standards may also differ from conventional financing.
Lenders May Consider
✓ Length and stability of self-employment
✓ Personal or business bank statement history
✓ Eligible recurring deposits
✓ Business expense calculations
✓ Credit history and credit score
✓ Down payment or available equity
✓ Cash reserves
✓ Property type and occupancy
✓ Loan amount
✓ Overall borrower financial profile
Bank Statement Loans vs. Conventional Mortgages
A conventional mortgage may still be the better option when a self-employed borrower can qualify using traditional income documentation.
The advantage of a bank statement loan is flexibility.
Traditional Documentation
Conventional Mortgage
Traditional mortgage underwriting typically evaluates self-employed income using tax returns and applies standard income calculations.
This may be appropriate when taxable income accurately supports the requested mortgage.
ALTERNATIVE DOCUMENTATION
Bank Statement Mortgage
Business deductions can reduce the income that counts under traditional underwriting, even when cash flow is strong.
A bank statement program provides another method of evaluating that income. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
That doesn’t automatically make a bank statement loan the right choice.
Whenever possible, we can evaluate both traditional and alternative-documentation options to determine which approach makes sense for your circumstances and financing goals.
Why Lender Selection Matters
Bank statement programs can vary significantly from one lender to another.
Lenders differ in which deposits they count and how they calculate business expenses. Cash reserve requirements and loan limits also vary.
As an independent mortgage broker, Platinum Lending Solutions can compare programs from multiple lenders.
We review how each program treats your income, along with its costs and requirements.
Bank Statement Loans in Oregon & Washington
Platinum Lending Solutions helps self-employed borrowers throughout Oregon and Washington evaluate traditional and alternative mortgage options.
We can review your income documents and compare a bank statement mortgage with other available options.
Could a Bank Statement Loan Work for You?
If you’re buying or refinancing a home in Oregon or Washington and traditional income documentation isn’t a good reflection of your financial situation, let’s take a closer look.
Tell us a little about what you’re trying to accomplish, and we’ll help you explore the mortgage options that may fit.
Ready to Review Your Options?
Start with a conversation about your income, business, property and mortgage goals.
Related case study: How a Bank Statement Refinance Helped Self-Employed Oregon Property Owners
