A bank statement mortgage loan allows self-employed borrowers or freelancers to qualify for a home loan using 12 to 24 months of personal or business bank statements, rather than traditional tax returns or W-2s. It is designed for those whose savvy tax write-offs result in an underrepresented net income on paper.

Instead of looking at your taxable income, lenders review your bank account’s average monthly deposits.

• Business Statements: Lenders generally apply an assumed expense ratio (typically 50%) to your gross revenue to determine your qualifying income. If your business averages in monthly deposits, your qualifying income is evaluated as per month.
• Personal Statements: Lenders evaluate your total deposits, excluding irregular transfers or non-income sources, to calculate your baseline cash flow.