Bank statement loans can be a streamlined alternative to traditional mortgage applications. For many hopeful homebuyers—especially self-employed individuals, business owners, and freelancers—getting approved for a mortgage using traditional income documentation can be challenging. Even if you are entirely able to afford a mortgage, lenders typically require W-2s, tax returns, and pay stubs, which may not accurately reflect your full financial picture if you have non-traditional income.
This is where a bank statement loan can be a game-changer. Instead of relying on tax documents, we can approve your application based on 12 to 24 months of personal or business bank statements, providing a more streamlined and flexible mortgage application process.
In many cases, it’s actually a less complicated and time consuming application process.
No Tax Returns Needed
One of the biggest hurdles we see among borrowers who have non-traditional income is a disparity between actual income and what your tax returns say. Thanks to being savvy about investments and deductions, your tax return may not even be close to accurately reflecting what you actually make. This can make it nearly impossible to qualify for a mortgage that requires tax returns to verify income.
The good news is, you can maximize tax returns and qualify for a mortgage with a bank statement loan. With a bank statement loan, we focus on your actual cash flow rather than tax deductions, providing a more accurate representation of your income.
A Simple and Efficient Process
The task of gathering all the documents you need for mortgage approval can be a bit time consuming, but a bank statement mortgage application is pretty straight forward. It’s often more simple and efficient because you really only need to provide us with 12-24 months of bank statements. We’ll also look at your credit score, but you don’t have to submit any information for us to do that.
Traditional mortgage applications require extensive paperwork, including:
- Multiple years of tax returns
- Profit and loss statements
- W-2s or 1099s
- Business financials and balance sheets
A bank statement loan eliminates this paperwork, making the process faster and easier. Instead, you provide 12 to 24 months of bank statements to demonstrate consistent income deposits, which then speeds up underwriting and reduces documentation headaches. Less paperwork = faster approvals and a smoother experience.
Loan Terms
In addition to the simple loan process, a bank statement loan provides lots of flexibility and advantageous terms. Some borrowers worry that even if a bank statement loan may be simpler in the application process, the rates and terms simply aren’t going to work.
However, in our experience the rates tend to be only about a point higher than other mortgages in any given market. You don’t need to anticipate extremely high interest rates or unreasonable terms. These are loans that really work to help self-employed borrowers buy the home they want. We’ve been helping our clients utilize this type of financing for many years, and have so many happy past clients to prove it.
Easier Financing for All Kinds of Goals
Remember, bank statement loans aren’t just for primary residences—they can also be used for:
- Second homes
- Investment properties
- Vacation homes
For real estate investors who may not have traditional W-2 income, a bank statement loan provides an easier way to finance multiple properties without the typical income verification hurdles.
Whatever your goals and concerns, we know we can help you find the financing that works for you. Ready to learn more about your loan options as a self-employed borrower, or applying for a mortgage? Contact us any time.