Bank Statement Loans

For all home loans, lenders need to verify your income before approval. In the case of bank statement loans, bank statements are used as income verification instead of W2s and your tax return. Typically, bank statement mortgage loans require 12 or 24 months’ worth of bank statements. One of our loan officers will then review your bank statements and verify the information with your bank.

Because of this alternative income-verification method, bank statement mortgages have become a popular option for self-employed individuals whose W2s and tax returns would not accurately reflect their full income.

Bank statement loans can benefit the following types of borrowers:

• Business owners
• Freelancers
• Consultants
• Contract workers
• Independent contractors
• Sole proprietors
• Gig economy workers
• Realtors
• Entrepreneurs

Bank statement mortgages provide a flexible mortgage financing solution for self-employed borrowers. According to the Bureau of Labor Statistics, there are approximately 16 million self-employed workers in the United States as of mid-2025, representing about 10 percent of the total workforce when including both incorporated business owners and unincorporated self-employed individuals. Unfortunately, many of these business owners and self-employed individuals face roadblocks in securing traditional mortgage financing due to how they file their taxes.

1. Calculate qualified income:

When you apply for a bank statement loan, an underwriter will calculate your qualified income by adding the total eligible deposits in your bank accounts for 12 or 24 months and dividing that number by 12 or 24 to give them an average monthly income.

2. Meet basic loan requirements:

Self-employed borrowers can choose to use 12 or 24 months’ worth of bank statements, but there are other requirements. For instance, lenders like to see that you’ve been self-employed for at least two years or one year if you’ve remained in the same type of role or industry.

3. Determine eligible deposits:

The deposits that can be used to calculate your income for a home loan depend on how you pay yourself:

• If you deposit money directly into your business account, lenders will typically use 50% of the deposits to determine your income. 
• If you deposit money directly into your personal account (or transfer funds from a business account to a personal account), lenders may allow 100% of your deposits to qualify for the loan. 
• Deposits that are not business-related are called “disallowed deposits” and will not be counted toward your income.

This doesn’t mean that you need monthly deposits, either. Instead, you may have seasonal income. For instance, if you earn $100,000 in just three months, lenders will divide that number by 12 (the number of months in a year) to find your average monthly income.

With a bank statement loan, it is possible to qualify for a mortgage with just bank statements. Bank statements are used in lieu of traditional income verification methods. Typically, 12 or 24 months’ worth of bank statements are required, but some individuals may be able to qualify based on the business’s P&L statement.

It’s also important to note that factors like your credit score and down payment will also be taken into consideration when establishing your loan terms.

Yes, you can get a second home, vacation home, or investment property with a bank statement loan. Second homes and investment properties can be purchased using bank statement loans for as little as 15% down payment.

Yes, bank statement loans are considered riskier than other mortgage options, especially for the lender. Since these loans are typically for self-employed borrowers who don’t have a traditional source of income and they’re not backed by Fannie Mae or Freddie Mac, they’re higher risk because they’re not guaranteed.

These loans may also be riskier for the borrower because they’re typically more expensive than conventional loans, so there’s an increased risk of defaulting on the loan. However, as long as you’re sure you can afford your monthly payments and your lender does their due diligence, there’s very little risk involved.

Interested in a bank statement loan but not sure where you stand financially? Here are some signs that you may be living beyond your means: 

• Having a credit score below 620: Credit bureaus garner information regarding your payment history. This includes outstanding loans and credit card payments. From this information, they compile a credit score which reflects your worthiness for credit. The score is ranked from a low of 300 to a high of 850. Lenders use this score to determine whether you qualify for a loan. Typically, a credit score below 620 means that you are not financially viable enough to be approved for a loan.
• You are saving less than 5 percent: Lenders want to see that you are not spending more than you make. If you are saving less than 5 percent of your income, then you will probably not qualify for a bank statement loan.
• Your credit card balances are on the rise: If you are only paying the minimum due on your credit card balance and your balance is rising each month, you are not a likely candidate for a bank statement loan. To keep your debt under control, you should only charge what you can pay off each month.
• Your house payments take up more than 28 percent of your income: If you’re spending more than 28 percent of your gross income on your mortgage payments, then you are unlikely to qualify for a bank statement loan.
• Your total payments (house plus the minimum payments on your credit report) take up more than 50 percent of your income: If you’re spending more than 50 percent of your gross income on your mortgage payments, then you are unlikely to qualify for a bank statement loan. If you can prove that the business pays the payment then it will not be counted against you.
• You are behind in payment of your bills: Buying items on credit and paying off the balance in installments has become a popular way to live in the U.S. Problems arise when the bills start to spiral out of control. If a large proportion of your monthly income is taken up by this type of payment plan on top of your utility bills, it is unlikely you will be eligible for a bank statement loan.

Generally, bank statement loans are considered higher risk for lenders, so they typically come with slightly higher interest rates and down payment requirements than traditional loans. But ultimately, it depends on the home’s purchase price and the loan amount.

Potential downsides of a bank statement loan include: 

• Must be self-employed for at least two years: One of the drawbacks for self-employed borrowers is that you have to be able to prove that you’ve been self-employed for two years—and if you haven’t quite reached that milestone, you’re out of luck and will have to wait. Exceptions are considered for business owners that have been in business for one year if you have at least two years of experience in the same line of work.
• Potentially higher interest rates: You may also have to contend with higher interest rates and down payments than more traditional loan options, but of course, this depends on your FICO score and overall financial circumstances. That said, Griffin Funding strives to secure competitive interest rates for our customers.

There aren’t any other loans that require bank statements, but you can use bank statements as a way to prove your income and qualify for other types of mortgages. In fact, you can use bank statements as one source of income verification for many of our Non-QM loans, such as jumbo loans and asset-based loans.

As an alternative to bank statement loans, we also offer P&L loans and 1099 mortgage loans. 

P&L Loans: 

• Qualify using a 12-month trailing profit and loss (P&L) statement only, prepared and signed by a licensed CPA or Enrolled Agent (EA).
• Griffin Funding uses the net income from your P&L – adjusted for ownership percentage and allowable add-backs – as your qualifying income.

1099 Loans: 

• As an independent contractor, you can qualify for a 1099 mortgage loan with your 1099s, not your tax returns. 
• Griffin Funding uses 100% of the income from your most recent year’s 1099(s) to qualify. You must have been contracted for at least two years.

If you’re looking for a self-employed mortgage, a bank statement loan is usually the best option. However, depending on your other sources of income, such as a full-time job in addition to your self-employed business endeavors, there may be other loan options for you to consider, such as:

• Conventional loans: Traditional home loans that meet the conforming loan limits and that meet the requirements set by Fannie Mae and Freddie Mac.
• Asset-based loans: These loans convert your assets to income to determine your ability to repay the loan.
• DSCR loans: Debt service coverage ratio (DSCR) loans are for real estate investors, focusing on rental property income rather than the borrower’s personal income.
• VA loans: Backed by the Department of Veterans Affairs, VA loans offer military veterans and active-duty service members favorable loan terms, including no down payment requirements.
• FHA loans: Supported by the Federal Housing Administration, these loans cater to first-time home buyers and those with lower credit scores, as they boast low down payments and flexible qualification criteria.
• Jumbo loans: These are mortgages that exceed the conventional loan limits, tailored for high-end properties or homes in competitive real estate markets.
• Bank statement home equity loans: Designed for self-employed individuals, these loans utilize bank statements to determine eligibility and allow homeowners to borrow against the equity built up in their property. You can check your mortgage statement for a breakdown of your outstanding balance to help you understand the equity built up in the property and use the Griffin Gold app to track your home value over time. 

Griffin Funding is proud to offer several self-employed home loan products including both personal and business bank statement loans. Whatever your employment and income circumstances, our loan officers can help find the best mortgage solution for your needs.

Non-QM loans like bank statement mortgages differ from traditional mortgages when it comes to how income is verified. Instead of using W-2s or tax returns, lenders evaluate 12–24 months of bank statements to determine the borrower’s income, making them ideal for self-employed borrowers or those with non-traditional income sources.

Non-QM loans also offer more flexible credit guidelines and debt-to-income ratios but often come with higher interest rates than conventional loans. Traditional loans follow stricter government regulations and guidelines, while non-QM loans are privately underwritten and more flexible as far as qualifications, loan terms, and usage.

	Bank Statement Loan	Traditional Mortgage
Who is it for?	Bank Statement LoanBusiness owners, freelancers, investors, or anyone who doesn’t receive a W-2	Traditional MortgageMost employees who receive a W-2
What is it used for?	Bank Statement LoanPurchasing a primary residence, a vacation home, or an investment property	Traditional MortgagePurchasing a primary residence, a vacation home, or an investment property
How is income verified?	Bank Statement Loan12-24 months of bank statements	Traditional MortgageTax returns and pay stubs
What’s the down payment?	Bank Statement Loan10% minimum	Traditional Mortgage 3% to 5% minimum (20% to avoid PMI)
What’s the minimum credit score?	Bank Statement Loan620	Traditional Mortgage620
How long is the loan term?	Bank Statement Loan15 to 40 years	Traditional Mortgage15 to 30 years

It depends. On most of our personal and business bank statement loans, we require the last 12 or 24 months’ worth of bank statements.

A credit score is one of the basic bank statement loan requirements for every lender.

Having a higher credit score is a good way to improve the chances of approval and keep your interest rates low on any type of mortgage including a bank statement loan. In order to qualify for bank statement loans with Griffin Funding, borrowers need a credit score of 620 or higher.

Income is just one of the lending criteria you’ll need to meet to qualify for a bank statement loan. If you’re trying to learn how to get a bank statement loan, you should understand that they work like many other loans.

So whether you’re a first-time buyer or this is your second, third, or fourth time purchasing a house, you’ll need to make a down payment. Of course, there are some types of government-sponsored loans that don’t require down payments, but Non-QM loans like bank statement loans do.

How much your down payment will be primarily depends on your credit score. For example, if you have a score of 680 or higher, you may qualify for a down payment of 10%. Meanwhile, if you have a credit score of 620, you’ll need to have a down payment of at least 20%. As you can see, bank statement loan down payments vary but can be higher than a traditional mortgage down payment.

In some cases it may be possible to get a bank statement loan if you’re not self-employed but have non-traditional income streams. For instance, freelance workers, gig economy workers, contractors, and realtors may be eligible for bank statement lending. However, it’s important to keep in mind that this type of financing is primarily for self-employed borrowers and business owners. 

You can get a bank statement loan if you’ve filed for bankruptcy, but there are a few caveats. For instance, you’ll need to wait at least two years to apply for any type of mortgage loan after bankruptcy, but there are some exceptions. For instance, mortgage lenders may be more lenient if you can afford a large down payment and higher interest rates.

Yes, you can often qualify for a bank statement loan if you receive 1099 wages. If you work as an independent contractor or freelancer, you may receive Form 1099 rather than a W-2, which can complicate the process of qualifying for a conventional mortgage. This makes a bank statement loan a convenient alternative to traditional financing.

While a bank statement loan can be a viable option for those receiving 1099 income, we also offer a specialized 1099 mortgage program. This program is very similar to our bank statement loan program, but allows borrowers to use 1099 forms rather than bank statements to qualify. Reach out today to learn more about our 1099 mortgage program and other self-employed mortgage options! Griffin Funding counts 100% of the 1099 amount as your income.

The expense factor for a bank statement loan is typically 50%, meaning lenders count only half of your deposits as qualifying income. This accounts for estimated business expenses. 

While we typically count 50% of bank statement deposits as income for business bank statement loans, we can offer an expense factor as low as 10% in some cases, depending on the type of business and number of employees. Keep in mind that for personal bank statement mortgage loans, we count 100% of bank statement deposits as income.

If you’re wondering how to provide bank statements for a bank statement loan, the good news is that the process is fast and simple—and you don’t need tax returns or pay stubs to qualify. For a bank statement mortgage, all you need are 12–24 months of personal or business bank statements that show your income and deposits.

Bank statements serve as the primary method lenders use to verify income for self-employed borrowers. If you’re not sure what counts as a bank statement or what lenders review, you can read our full guide on what a bank statement is.

The easiest way to provide bank statements is through Griffin Funding’s secure digital portal. Using industry-leading bank-connection technology, you can instantly and securely sync 12–24 months of statements from nearly all U.S. banks and credit unions with just one click. This eliminates the need for manual uploads and significantly speeds up your loan process.

Alternatively, you can also download your statements directly from your bank’s online portal by logging into your account and navigating to the statements section. And if you can’t find them online, your bank can mail printed copies to you upon request.

When lenders are reviewing your bank statements to determine whether they can approve you for a loan they are looking for the following information:

• Positive account balance
• Little to no overdrafts
• Regular monthly income deposits
• Enough money to cover at least 10% down payment (10% down requires 680 minimum credit score, up to a $1,000,000 loan amount)
• Enough money to cover several months’ worth of mortgage payments as well as closing costs
• When income was deposited into your account (generally, they want the income to be seasoned, meaning it’s been in your account for a while and wasn’t all just deposited right before you applied for your loan)

Eligibility for a bank statement requires total deposits minus disallowed deposits. This amount is then divided by the number of bank statements, whether it is the 12 or 24 months statement.

Another option is that if the co-borrower is a W2 employee you can use a hybrid of W2 and tax return income from the co-borrower and bank statement income from the borrower or assets from the co-borrower and bank statements from the borrower. Non-QM loans can use multiple sources of blended incomes to qualify.

Deposits which are disallowed in regards to a bank statement loan include transfers between bank accounts and cash or large deposits, which can raise a level of concern and may require a letter of explanation.

It can be difficult to find a bank statement loan with a reliable lender. However, since these loans are based on bank statements instead of traditional income verification methods, they often open doors of opportunity for many borrowers who otherwise wouldn’t be able to qualify for a mortgage. As long as you have the bank statements to prove your income and a decent credit score, it otherwise shouldn’t be too difficult to qualify.

When it comes to getting a bank statement loan, the main hurdle is finding the right lender to work with. Our team at Griffin Funding works hard to ensure access to bank statement loans for self-employed workers of all backgrounds and industries. Many gig workers, freelancers, contractors, and other workers rely on these options to afford their homes, and our goal is to help more professionals find the right bank statement loan for their specific needs.

After completing the bank statement mortgage process and closing on the loan, we fund the mortgage and then the escrow or title agent must record the deed with the county recorder’s office. Escrow cannot disburse funds until they receive recording confirmation from the county. Depending on how early in the day the loan is funded and the county where the transaction is taking place, funds will typically be disbursed the same day or the next business day.

As an experienced bank statement lender, Griffin Funding offers a streamlined mortgage process that helps you get to the closing table quickly and get the funds you need. 

Note that for certain refinance loans, a 3-day waiting period may be required before the loan is funded. However, this waiting period does not apply to purchase loans.

At Griffin Funding, we strive to complete the bank statement mortgage process and close on the loan in 30 days or less. When taking out a self-employed mortgage such as a bank statement loan, you can generally expect a closing timeline similar to that of a traditional mortgage loan. 

In order to ensure the quickest closing time on your bank statement loan, we recommend preparing and organizing all necessary documentation prior to applying. Additionally, once you’ve begun the mortgage process, make sure to be honest with your lender and answer any questions they may have in a timely manner.

Here are a few general steps to take to find the right mortgage lender:

1. Check their ratings and reviews: First, you want to determine whether they’re a credible lender you can trust. One of the ways you can do that is by checking their ratings and reviews across several platforms. Do they have good reviews? What are the biggest complaints, if any?
2. Feel them out: See what their customer service is like before moving forward with your loan. Do they seem to have your best interest in mind? Are they helpful or are they inattentive?
3. Know what questions to ask: Savvy borrowers will ask questions and learn about all the attached fees, requirements, and costs aside from interest rate payments in the principal amount. You want to find the best loan terms before you settle on a bank statement mortgage.
4. Proven track record funding bank statement loans: Make sure the lender has the experience and expertise with self-employed borrowers and bank statement loans. Not all bank statement loans are the same; therefore, the lender should have multiple products and programs for all types of bank statement non-QM loans. Choosing a lender that specializes in bank statement loans gives your loan a better chance of closing.

Not all lenders specialize in non-QM products like bank statement loans, and many banks or credit unions have strict overlays that make qualifying harder for self-employed borrowers. Griffin Funding is your trusted partner for flexible and fast bank statement loans. Here’s why:

• Specialized expertise: We are a direct-to-consumer non-QM lender with deep experience helping self-employed borrowers and business owners qualify when traditional lenders say no.
• AI-powered speed: Our AI underwriting platform (“LIA”) — which was featured in HousingWire and earned us a spot on Inc.’s Best in Business 2025 — helps navigate hundreds of pages of investor guidelines instantly, delivering faster approvals and faster closings. Meanwhile, other lenders underwrite their bank statement loans manually.
• Proven track record: With thousands of 5-star reviews on Google, Yelp, and the BBB, we’re recognized for outstanding service and reliability.
• Flexible solutions: Loan amounts up to $20M, as little as 10% down, and multiple qualification paths make us the lender of choice for entrepreneurs and self-employed borrowers nationwide.
• Multiple bank statement programs: Self-employed borrowers often have unique and complex financial situations, which is why we offer three flexible options. Plan A uses a standard expense ratio, Plan B allows your CPA to verify actual expenses (with ratios as low as 10%), and Plan C requires only the first page of your bank statements – designed for the fastest possible qualification, approvals, and closings.

Griffin Funding has been in business since 2013 and has become a leader in non-QM lending by combining innovative programs with cutting-edge technology. Our goal is simple: help you qualify with confidence and close quickly so you can move forward with your goals.

Refinancing your home loan allows you to turn your home’s equity into cash in some cases. Those with existing mortgage loans may be able to refinance their loan with bank statements with a cash-out refinance or HELOAN.

This option allows you to leverage the equity in your home in exchange for cash, which you can then use to pay off debts or other major expenses. In most cases, borrowers can have a cash-out refinance loan matching up to 80% of the value of their property (or up to 85% with a HELOAN). 

Use our free bank statement loan refinance calculator to calculate your monthly savings.

Wondering if it’s time to refinance? There are a few different reasons you may want to refinance your bank statement loan. These include:

• Lower mortgage rates: If current mortgage rates are less than your loan’s mortgage rate, refinancing could earn you a loan with a better interest rate. As a general rule of thumb, experts typically suggest refinancing when interest rates are at least 1% lower than your current interest rates, but remember that this is a general rule. If a slightly lower interest rate could be beneficial to you, it may be worth refinancing.
• Different loan terms: Refinancing your loan also opens you up to different loan terms. If your financial situation has changed and you can afford to pay more each month, you may want to shorten the term of your loan. Alternatively, if you’d like to pay less each month and are comfortable paying over a longer period of time, lengthening the terms of your loan may be right for you.
• Changing listed borrowers: Refinancing also allows you to change the borrowers listed on your loan. You may choose to remove a borrower from your loan or add a new borrower. These can be achieved through refinancing.
• Different loan type: Refinancing allows you to change the type of loan you have. Through refinancing, you can switch between an adjustable-rate mortgage or a fixed-rate mortgage.
• Cash-out refinancing: Cash-out refinancing is a way to draw on your home’s equity to obtain cash. In these cases, you’ll take out a new loan and use it to pay off your old loan. Then, you can use the remaining balance for cash.