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How do bank statement loans work?
Deposits in, qualifying income out. Here is the process, step by step.
By James Forte, NMLS 16443 · Updated November 9, 2026
Short answer: A bank-statement loan is a Non-QM mortgage that uses 12 or 24 months of personal or business bank deposits, instead of tax returns, to calculate the income you qualify with. The lender averages eligible deposits, applies an expense factor to business accounts, and then underwrites credit, assets, and the property like any other mortgage.
Step 1: Pick the statements
Most programs use 12 or 24 consecutive months of statements. You can often choose personal accounts, business accounts, or in some programs a mix. We look at which set shows your income most accurately before anything is submitted.
Step 2: Count eligible deposits
Underwriting adds up deposits and removes the ones that are not income: transfers between your own accounts, loan proceeds, refunds, and one-time items such as the sale of a car. Large or unusual deposits usually need a short written explanation.
Step 3: Apply the expense factor (business accounts)
Business deposits are not all profit, so business-statement programs subtract expenses. That is usually a fixed expense factor set by the program, or a percentage supported by a letter from your CPA or tax preparer. Personal-account programs usually count eligible deposits without that reduction, because the money has already left the business.
Step 4: Turn it into monthly income
Illustrative example only: if eligible business deposits average $20,000 a month and the program uses a 50% expense factor, qualifying income would be about $10,000 a month. Your actual factor and result depend on the program and the file.
Step 5: Underwrite the rest of the loan
From there it looks like a normal mortgage: debt-to-income, credit, down payment, reserves, the appraisal, and title. Bank-statement programs can go up to about $3 million, depending on the file. Pricing is usually higher than agency loans because of the different documentation, so call for today’s terms.
Next: Who qualifies for a bank statement loan? · Bank statement loan requirements · Program: Bank-statement / Non-QM · By state: Connecticut, Florida, Texas, and more.
General information, not a rate quote, a commitment to lend, or legal or tax advice. All loans are subject to credit, income, property, and underwriting approval.
Frequently asked questions
Do bank statement loans use tax returns?
Usually not for qualifying income. The deposits replace the tax return. You may still need proof the business exists, such as a CPA or tax-preparer letter or a business license.
Personal or business statements: which is better?
It depends on how money moves through your accounts. Personal statements usually count eligible deposits in full. Business statements subtract an expense factor. We compare both before submitting.
Are bank statement loans only for buying a home?
No. Many programs allow purchases and refinances, including cash-out, on primary homes, second homes, and investment properties, subject to guidelines.
Are rates higher on bank statement loans?
Often, yes, because Non-QM pricing differs from agency pricing. We do not post rates. Call for today’s terms on your scenario.
Fastest way to start
Talk to us about a bank-statement loan
Questions about your situation? Call or apply. Forte Financial funds loans in-house as a licensed lender in Connecticut, Florida, South Carolina, and Texas, and can still shop a loan if another investor fits better. In New York, New Jersey, Massachusetts, Pennsylvania, and North Carolina, we work as a licensed mortgage broker and shop your loan with our investor network. In New York, loans are arranged through third parties.
- Have 12–24 months of statements handy.
- Tell us personal, business, or both.
- No rate, approval, or timeline guarantees.
Licensed lender and broker. No rate, approval, or timeline guarantees.