Bank Statement Loans: Get a Mortgage as a Self-Employed First-Time Home Buyer

By Bill Lyons | Updated on January 6, 2025

Bank statement loans for first-time buyers are a way to secure a mortgage using non-traditional means. When you have self-employed income that you are depositing into a bank account, you can obtain a mortgage through a bank statement loan. 

A bank statement loan can make it easier for business owners, contractors, and freelancers to provide proof of income when applying for a mortgage. So, if you are looking to buy a home for the first time and you don’t have a typical job that provides pay stubs, consider applying for a bank statement loan through Griffin Funding. 

Below, we go into more detail about what bank statement loans are, how they work, and how you can qualify.

What Is a Bank Statement Loan?

Bank statements loans are an excellent option for individuals who are self-employed and don’t have traditional pay stubs for the lender to consider. You will need to have bank statements for at least 12 months that provide proof of regular deposits in order to qualify for a bank statement mortgage. This allows you to seek a mortgage without having to show the net income listed on your taxes and makes it possible for you to qualify for a mortgage without pay stubs.

How Does a Bank Statement Mortgage Work?

Bank statement loans make it possible to qualify for a non-traditional mortgage using your bank statements instead of pay stubs or tax returns. In order to get approved for a bank statement loan, you will have to fill out an application that includes at least 12 months of bank statements. Your bank statements, along with your credit score and debt-to-income ratio, will be considered during the application process. 

Once you are approved, a bank statement mortgage will function like a traditional home loan. Your loan will be funded, allowing you to purchase your home, and then you will begin repayment through monthly mortgage payments. With these non-QM loans, the criteria for qualification is more flexible when compared to traditional loans. 

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Benefits of Bank Statement Loans for First-Time Home Buyers

There are a number of benefits that come with choosing bank statement loans for first-time home buyers, especially if you are a self-employed or a couple without pay stubs. If you are looking to buy your first home, but you can’t provide proof of income through pay stubs or tax returns, this type of loan is the way to go.

A first-time home buyer bank statement loan gives the lender flexibility in the terms of the loan. This makes it possible for potential home buyers to secure a mortgage they may not qualify for using traditional lending criteria. The benefits of bank statement loans to purchase a home or property include:

• Verified income through monthly deposits: Regular monthly deposits in your bank account are reviewed and considered your verified income for the loan application.
• Flexible documentation: You can show 12 or 24 months of bank statements to qualify for a bank statement loan.
• No need for tax returns: There’s no requirement to show your income tax returns in order to secure a mortgage.
• Low down payment: It is possible to secure a bank statement home loan with as little as 10% down.
• Higher DTI ratio: You can qualify with a debt-to-income ratio as high as 55%.
• Large borrowing potential: Depending on your qualifications, you may be able to borrow up to $5 million with a bank statement loan.
• Rate flexibility: You can choose to secure an adjustable-rate or fixed-rate mortgage through the bank statement loan process.

The bank statement loan process is one where you are able to have more flexibility than with a traditional mortgage. It is important to get your credit score as high as you can in order to qualify for the best home loan for your specific needs. Whether you are applying for FHA loans, asset-based loans, or a bank stateme

Bank Statement Loan Qualification Requirements

There are a number of key requirements you must meet in order to secure a bank statement mortgage with Griffin Funding. This type of non-traditional mortgage offers you more flexibility when it comes to the parameters for securing a loan to purchase a new home. The key requirements you must meet in order to qualify for a bank statement loans include:

• Self-employed: You must be self-employed or a business owner for a period of at least two years to secure a bank statement mortgage loan.
• Credit score: Your credit score has to be 620 or higher for a bank statement mortgage loan to be approved.
• Minimum and max loan amounts: The lowest amount you can borrow for a bank statement mortgage loan is $100,000, while the highest amount possible is $5 million.
• PITI reserves: As a guarantee for the mortgage, you must have four months of PITI in the bank if the loan is less than $1 million, and six months of PITI if the loan is higher than $1 million.
• Minimum down payment: You must be able put down at least 10% of the property’s purchase price.

Take a look at the criteria for securing a bank statement loan, and make sure you meet the qualifications before you apply. If you’re not sure whether you meet all of the requirements to qualify for a bank statement home loan, reach out and we can help you determine your eligibility. 

How to Apply for a Bank Statement Loan as a First-Time Home Buyer

In order to secure a bank statement loan as a first-time home buyer with Griffin Funding, we have established a straightforward process for you to follow:

1. Schedule a discovery meeting, where you have an in-person, virtual, or phone discussion to talk about what your mortgage goals are, what you have for a down payment, your credit score, and your monthly income.
2. Fill out our online application. You can fill out the application during or after your initial discovery meeting if you want to work with Griffin Funding to secure a mortgage.
3. Authorize our loan specialist to lock in the interest rate you have been quoted as part of your potential mortgage.
4. We will send an initial loan application either digitally or via overnight mail, depending on your preference, and you will be able to review and sign it. 
5. Get a checklist of all the documentation you will need to give our mortgage lender in order for your mortgage to be approved.
6. Your mortgage paperwork will be submitted to our underwriting department and processed for approval.
7. The property goes through the appraisal process in order to establish the condition of the property and assess the value to determine the mortgage needed.
8. Once your mortgage has undergone an underwriting and appraisal process, we will notify you if anything else must be completed before the final document signing. 
9. Sign all of your loan documentation in the presence of a notary.
10. Your loan will be funded and recorded.

Alternatives to Bank Statement Loans

While bank statement loans are a great option if you have non-traditional income, they still may not be the best fit for everyone. Here are some common alternatives to bank statement loans that are also great for first-time buyers:

• Conventional loans: Offered by private lenders, conventional loans typically require a higher credit score and a larger down payment relative to other mortgage types, but they often come with lower interest rates and better terms if you qualify. They are a great option if you have stable, verifiable income and strong credit.
• Asset-based loans: These loans allow you to qualify based on the value of your assets rather than your income. For first-time buyers with significant savings or other assets, this can be an attractive option, as it may be easier to secure than a traditional mortgage.
• 1099 mortgage loans: Instead of relying on tax returns, these loans use your 1099 income from the past 1-2 years. This option is ideal for freelancers, gig workers, and independent contractors who have non-traditional income streams and may not qualify for conventional loans.
• Government-backed loans: Government-backed loans — such as VA loans, FHA loans, and USDA loans — are excellent for first-time buyers looking to purchase a home with more flexible requirements. VA loans are available to veterans and active-duty service members, offering lower interest rates and no down payment. USDA loans are designed for rural home buyers and offer low or no down payments and competitive rates. FHA loans require a low down payment but are easier to qualify for, making them ideal if you have less-than-perfect credit.

Get a Mortgage as a Self-Employed First-Time Buyer

Bank statement loans for first-time home buyers are an excellent option when you are self-employed and can show income via your bank statements. When you don’t have a traditional paycheck, you can still secure a mortgage if you are able to show income this way. Plus, with a high credit score and low DTI ratio, you can secure the best rate and terms for your loan.

At Griffin Funding, we’re here to guide you through the process and help you find the perfect mortgage for your needs. With our Griffin Gold app, managing your mortgage journey is easier than ever. You can explore loan options, access smart calculators, and stay connected with our loan specialists, all in one place.

Whether you’re a first-time home buyer, self-employed, or want to explore other options, our team is ready to help. Reach out to get a quote and see what you qualify for. It’s time to find your dream home and secure the mortgage you need to make your purchase.

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 22 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 10 years in business.