For self-employed individuals and business owners, securing a mortgage can be challenging when traditional income documentation—such as W-2s and tax returns—does not accurately reflect their financial reality. That’s where bank statement loan programs come in, offering a flexible and viable path to homeownership.

What Is a Bank Statement Loan?

A bank statement loan is a type of mortgage that allows borrowers to qualify based on their bank deposits rather than tax returns or pay stubs. This program is particularly advantageous for entrepreneurs, freelancers, and gig economy workers who have strong income streams but may write off substantial expenses on their tax returns, reducing their taxable income.

Key Features of the 12 & 24-Month Bank Statement Program

When considering a bank statement loan, it’s essential to understand the benefits and features that set it apart from conventional mortgages. Here’s what makes this program stand out:

• Highly Competitive Rates & Fast Funding – Enjoy industry-leading rates and quick closing times, ensuring you can secure financing without unnecessary delays.
• No P&L Statements Required – Unlike many self-employed loan options, these programs do not require profit & loss statements, simplifying the documentation process.
• High Loan Amounts – Borrow up to $3,000,000, making this program ideal for high-income earners seeking substantial loan amounts.
• Flexible Loan-to-Value (LTV) Ratios – Qualify for up to 90% LTV without requiring private mortgage insurance (PMI), depending on your loan size and purpose.
• Business and Personal Bank Statements Accepted – Use either business or personal accounts to verify income, offering added flexibility for self-employed borrowers.
• Multiple Business Accounts Allowed – If you manage finances through more than one business account, all can be considered to provide a comprehensive view of your earnings.
• Low Business Expense Ratios – With expense ratios as low as 10%, more of your deposits count toward your qualifying income, increasing your purchasing power.
• Ownership Flexibility – You don’t have to be the 100% owner of your business to qualify, making this a great option for business partners and co-owners.
• Common-Sense Approach to NSFs & Overdrafts – Unlike traditional lenders that may penalize minor overdrafts, this program considers the bigger financial picture, offering flexibility for entrepreneurs managing cash flow.

Who Can Benefit from a Bank Statement Loan?

This mortgage program is ideal for a variety of self-employed professionals, including:

• Small business owners
• Freelancers and independent contractors
• Real estate investors
• Consultants and coaches
• Gig economy workers (rideshare drivers, content creators, etc.)
• Medical professionals with private practices

If you earn substantial income but struggle with traditional mortgage qualification due to tax write-offs, this loan program offers an excellent alternative.

How to Qualify for a Bank Statement Mortgage

Qualifying for a bank statement mortgage is straightforward, but it does require meeting certain criteria. Lenders will generally look at:

1. 12 or 24 months of consecutive bank statements to assess your average monthly income.
2. A reasonable business expense ratio (as low as 10%) to determine qualifying income.
3. Creditworthiness – While bank statement loans are more flexible, a solid credit score improves approval odds and secures better rates.
4. Down Payment – While some borrowers can qualify with as little as 10% down, higher LTV loans may require additional considerations.
5. Debt-to-Income Ratio (DTI) – Lenders will evaluate your total monthly debts versus your income to ensure affordability.

Why Choose a 12-Month vs. 24-Month Bank Statement Loan?

Lenders offer both 12-month and 24-month options, and choosing the right one depends on your financial situation:

• 12-Month Bank Statement Loan: Provides a shorter income review period, perfect for those with strong recent earnings.
• 24-Month Bank Statement Loan: Offers a longer financial track record, often leading to better rates and stronger loan approval.

Get Started with a Bank Statement Loan Today

If you’re self-employed and looking for a flexible mortgage solution, a bank statement loan could be the perfect fit. With competitive rates, high loan limits, and a streamlined qualification process, this program opens doors for those who may otherwise struggle with traditional income verification methods.

At North Star Mortgage Network, we specialize in helping self-employed professionals achieve their homeownership dreams. Contact us today to explore your options and get pre-approved for a bank statement mortgage that works for you!