By Bill Lyons | Updated on February 25, 2025
TABLE OF CONTENTS

    Becoming a homeowner is a big step, and you must be financially prepared. Use our bank statement loan calculator to help you determine your maximum home price, loan amount, and estimated closing costs.

    KEY TAKEAWAYS

    • Bank statement loans are designed for self-employed individuals, freelancers, and business owners whose tax returns may not reflect their actual income. 
    • Our bank statement loan calculator helps borrowers estimate their borrowing potential and home affordability.
    • Enter some basic financial information in order to estimate how much house you can afford with a bank statement loan and get an idea of what your monthly mortgage payment would look like.

    How Do Bank Statement Loans Work?

    For certain individuals, their yearly income taxes do not reflect their actual income. This is especially true for those who are business owners, independent contractors, self-employed, freelancers, or retirees, who make up a sizable portion of the population. In fact, there are nearly 17 million self-employed people in the United States, making up over 10% of the total working population.

    This can make things difficult when it comes time to apply for a traditional mortgage loan, which measures a borrower’s income using pay stubs and tax returns. Due to this, entrepreneurs and those who do not receive a W-2 from an employer often do not qualify for a mortgage.

    A bank statement loan is the perfect solution for those who need an alternate way to verify their income to ensure mortgage approval. Instead of qualifying for a home loan based on your income taxes, bank statement loans are a no-income verification mortgage where qualification is based on your bank statements as opposed to your tax returns.

    With a bank statement loan, the lender typically requires several months of bank statements to prove you are financially able to repay the loan. To qualify for this type of financing, you will usually need to provide a lender between 12 and 24 months of bank statement deposits. In some cases, you may even be able to secure a three month bank statement loan if you’re an exceptionally qualified borrower. This type of financing is also a great option for retirees looking for a retirement mortgage since it allows them to qualify on their bank deposits, savings or investment income.

    Types of Bank Statement Loans

    Bank statement loans come in different forms to fit the unique needs of borrowers with non-traditional income. 

    Whether you’re buying a home, refinancing your mortgage, or tapping into your home’s equity, bank statement loans provide flexible options tailored to your financial situation.

    • Bank statement purchase loans: These loans are designed for self-employed borrowers or individuals with non-traditional income who want to buy a home. Instead of relying on pay stubs or tax returns, this loan allows you to qualify based on your bank deposits.
    • Bank statement refinance loans: Bank statement refinance loans enable you to tap into your home’s existing equity and convert it into cash. You can adjust your existing mortgage by extending your loan term, locking in a better interest rate, or changing certain loan terms.
    • Bank statement home equity loans: These loans allow you to tap into your home’s equity to access funds for major expenses, investments, or emergencies. Instead of going with a traditional income verification, bank statement home equity loans use bank statements to determine eligibility.
    • P&L loans: Profit and loss (P&L) loans are specifically designed for business owners whose taxable income may not reflect their actual financial situation. This type of loan uses P&L statements instead of tax returns to verify income.
    • 1099 loans: 1099 mortgage loans allow independent contractors and gig workers to use their self-employment income for homeownership without the traditional W-2 requirements.

    How to Use the Bank Statement Loan Calculator

    Determining how much you can afford to borrow when securing a home loan can help you start the search for your dream home before applying for a loan. We can help you determine how much home you can afford based on your current financial situation. Follow these steps to get an estimate of how much home you can afford using a bank statement loan:

    1. Check Your Loan Type

    Our bank statement loan calculator works for personal and business property loans to help borrowers of all types determine how much they can afford to borrow.

    2. Enter Bank Statement & Other Income Information

    Your income is a significant factor in determining your ability to repay. Enter your bank statement income and share your gross annual income and down payment amount to determine your loan amount. Remember, the higher your down payment, the less you’ll need to borrow. Additionally, a down payment of 20% can help you avoid private mortgage insurance (PMI) that increases your monthly payments.

    3. Provide Monthly Debt Information

    Your monthly debts are subtracted from your monthly income to determine how much cash you have on hand throughout the month. Debts included are:

    • Credit cards
    • Mortgages
    • Auto loans
    • Student loans
    • Personal loans
    • Child support and alimony

    4. Indicate Monthly Housing Expenses

    Monthly housing expenses include property tax, PMI, HOA fees, utilities, and homeowners insurance. Our bank statement mortgage calculator considers these monthly housing expenses, subtracting them from your total monthly income to determine the loan amount.

    5. Enter Available Fund Amounts

    How much have you saved for purchasing a home? Entering your available funds saved for down payment, closing costs, and maximum principal and interest (PI) payments can help determine whether you can afford the loan and associated costs.

    6. Provide Funding Information

    Tell us about the loan you want, including the term, interest rate, down payment, home price,
    estimated closing costs, and total loan amount.

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    Key Benefits of Bank Statement Loans

    Bank statement loans are a great option for self-employed individuals, freelancers, and business owners with non-traditional income. These loans offer flexibility and accessibility that traditional mortgages often lack. 

    Other key benefits include:

    • Qualify with bank statements: Borrowers can qualify using 12-24 months of bank deposits instead of W-2s or tax returns.
    • High loan limits: Higher loan limits allow you to borrow up to $20 million in home financing. 
    • Down payments as low as 10%: Qualified borrowers can get a bank statement loan with as little as 10% down. 
    • Purchase vacation and investment properties: Bank statement loans can be used to buy not just a primary residence, but also vacation homes and investment properties. 
    • Streamlined application process: Bank statement loans often have a simpler application process, especially with experienced lenders.
    • Flexible qualification requirements: There is higher credit flexibility available to borrowers with lower credit scores compared to traditional loans.

    Bank Statement Loan Qualification Requirements 

    Instead of relying on traditional documentation like W-2s or tax returns, these loans focus on your bank deposits to determine eligibility. 

    To qualify for a bank statement loan, borrowers must:

    • Be self-employed or a business owner for at least two years.
    • Provide 12-24 months of personal or business bank statements.
    • Minimum credit score of 620.
    • A down payment of at least 10% of the home’s purchase price.
    • Maintain a DTI ratio of 50% or lower.
    • Provide proof of business ownership, such as a license or registration.

    The 28/36% Rule

    Your debt-to-income ratio is an important indicator of whether you can afford to pay back a loan by comparing how much you earn to your monthly debts. DTI requirements vary by lender, but generally, they want to see a DTI of 43% or lower. The ideal DTI is 36%, with 28% of the debt going toward the mortgage payment.

    In other words, lenders want to see 28% of your income spent on housing expenses and no more than 36% on total debts, including mortgage, credit card, and loan payments. This rule is often used to determine eligibility for a loan and can help borrowers determine if they can afford one.

    Try Our Bank Statement Mortgage Calculator Today

    Are you ready to become a homeowner? Griffin Funding’s bank statement calculator can help determine if now is the right time to purchase a home. As a nationwide mortgage lender, we offer a variety of loan programs for any type of borrower. Secure funding for your dream home by getting started online today.

    Find the best loan for you. Reach out today!

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    Frequently Asked Questions

    How are bank statement loans calculated?

    Bank statement loans are calculated by an underwriter who will add the total amount of your bank deposits for 12 or 24 months. This total is then divided by 12 or 24 respectively to determine your average monthly income to see if you qualify for the home loan.

    What are bank statement loans for?

    Bank statement loans can be a great option for those whose yearly income taxes do not reflect their actual income like business owners, independent contractors, self-employed individuals, freelancers, or retirees.

    Using a bank statement loan, you can bypass the traditional income verification process and get the financing you need to purchase a home. Bank statement loans are flexible in how you use them as well. With a bank statement loan, you can purchase a primary residence or a vacation home or an investment property, depending on your needs and preferences.

    How big of a loan can I qualify for using bank statements?

    With a bank statement loan, you can borrow up to $20 million. You can also qualify for a bank statement HELOAN that allows you to borrow up to 85% of your property’s value.

    Is getting a bank statement loan hard?

    There are certain requirements that you’ll have to meet in order to qualify for a bank statement loan. For instance, you’ll have to meet the minimum eligibility requirements for this type of financing, which include being a business owner or self-employed for at least two years. Another challenge involved in getting a bank statement loan is finding a lender that offers this type of financing at a competitive rate.

    However, experienced lenders like Griffin Funding help to streamline the loan application process and make it as easy as possible for qualified borrowers to secure bank statement loans. And, while borrowers do have to meet certain requirements to qualify for bank statement loans, this type of financing can actually be easier to qualify for than traditional home loans. That’s because bank statement loans cater to those with non-traditional or fluctuating income, who would otherwise face major roadblocks when navigating the traditional income verification process.

    We also offer free tools like the Griffin Gold app to make managing your finances and comparing your loan options easier.

    Do you have to be self-employed to qualify for a bank statement loan?

    Yes. You must be self-employed or a business owner for at least two years to qualify for a bank statement loan. In some cases, you may be able to qualify for a bank statement loan if you only have one year of self-employed experience but at least two years of experience in the same position or field.

    What is the interest rate for a bank statement loan?

    Since bank statement loans are riskier for lenders, they do often come with higher interest rates. However, specific rates can vary based on factors such as a borrower’s credit score, DTI ratio, financial history, and income. Griffin Funding strives to offer competitive rates to borrowers and welcomes the opportunity to work with you to help qualify you for a bank statement loan.

    What other mortgage calculators do you offer?

    We offer a handful of mortgage calculators to help you understand your options when it comes to loans. These tools are designed to make complex calculations much easier, giving you quick insights into what a particular loan option could look like for you.

    Take advantage of our other calculators like our: 
    • DSCR calculator helps real estate investors determine if a property’s rental income is sufficient to cover the mortgage payments. 
    • Blended rate calculator combines the interest rates of multiple loans into a single blended rate, giving borrowers a clearer picture of their overall borrowing costs. 
    • 2/1 buydown calculator shows you how much you can save with a temporary interest rate reduction during the first two years of your loan. 
    • Debt consolidation calculator helps borrowers determine the savings and benefits of consolidating multiple debts into a single mortgage loan. It provides insights into potential lower payments and reduced interest rates.
    • VA loan calculator, which is specifically for eligible veterans and active-duty service members, taking into consideration factors like funding fees, interest rates, and benefits unique to VA mortgages.
    Bill Lyons

    Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 23 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 11 years in business.