Bank statement loans
A straight explanation of how this part of the mortgage business is built, and what it means for a self-employed borrower.
Call or text 704-890-7168You searched for who offers bank statement loans and you probably got a list of company names you had never heard of. Then you went to one of their websites and found no application, no rates, and no phone number for borrowers. Just a login for brokers.
That is not you doing it wrong. That is how this corner of the mortgage business is built, and almost nobody explains it to the person actually trying to buy a house. So let me.
Retail lenders take applications from the public. Your bank, the credit union, the national names you see advertised. You can walk in, call, or apply on their website.
Wholesale lenders do not. They have no branches, no consumer advertising and no borrower-facing application. They fund loans that reach them through licensed mortgage brokers, and that is the only way in.
Most non-QM lending lives on the wholesale side. Bank statement, 1099, profit and loss, asset based and DSCR programs are overwhelmingly wholesale products. Retail banks mostly do not offer them, because a bank’s entire underwriting system is built around tax return income and these programs exist specifically to look at something else.
So here is the irony. The lenders most likely to say yes to a self-employed borrower are the exact lenders a self-employed borrower cannot call.
If you have been searching, you have probably run into some of these names already. They are among the wholesale lenders active in non-QM and bank statement lending:
Do not spend your afternoon trying to apply to them. That is not a criticism of any of them, it is simply their business model. They serve brokers, not the public, and the ones with the word wholesale in the name are telling you so directly.
For what it is worth, I am approved with every lender on that list. That is not a boast, it is the point. The value of a broker is the number of different rulebooks your file can be run against.
This is the part no list of company names will tell you, and it is the part that decides your loan.
Every one of these lenders writes its own bank statement guidelines. Same borrower, same deposits, different qualifying income. They differ on:
Which is why “I was declined for a bank statement loan” is usually not a verdict on you. It is one lender’s version of the arithmetic, run once.
People still ask me for a no doc loan, and the honest answer is more interesting than yes or no.
What disappeared after 2008 was the stated income loan, where you wrote a number on an application and nobody checked it. That is genuinely gone and it is not coming back.
What exists now is called a no ratio loan. You do not list income at all. There is no income figure on the application and no debt-to-income ratio calculated, which is where the name comes from. The lender qualifies you on everything else instead: your credit, your down payment, your reserves and the property.
I can place these through three different lenders. The trade is real, and worth understanding before you ask for one:
Guidelines move, so treat that as the shape of the deal rather than a quote. But the shape has been stable for a while. Income documentation can be removed from the file entirely, and you pay for it in down payment, reserves and cost rather than in paperwork.
Who it genuinely suits: someone with real assets and a complicated or private income picture, who would rather pay more than document it. Who it does not suit: someone reaching for the biggest loan they can get. This is the wrong tool for that and I will tell you so.
Through a mortgage broker licensed in your state and approved with those lenders. That is the whole mechanism.
A broker is not a middleman adding a markup on top. The wholesale lender sets the pricing, and the broker’s compensation is disclosed to you on your loan estimate like every other cost in the file. You are not paying extra for the access.
What you should expect from whoever you use: that they read your actual statements before promising you anything, that they can tell you which lender they are sending you to and why that one, and that they will tell you when a conventional loan would serve you better than a bank statement loan. Plenty of the time it would.
These work on me too. If the answers are vague, keep shopping.
Someone who cannot answer one and three is learning on your file, and your file is not the place to learn.
I am Scott Hastings, NMLS #926762, a mortgage broker with more than twenty years in lending. Most of that has been with self-employed borrowers and real estate investors, which means bank statement files are ordinary work here rather than something unusual.
I broker under Arbor Financial Group, so I am approved with a number of the wholesale lenders this page describes. If your file belongs at one of them, that is where it goes. If it belongs somewhere I am not approved, I will tell you that too.
Licensed in 13 states: North Carolina, South Carolina, Florida, Georgia, Virginia, Arkansas, Indiana, Maryland, Missouri, Montana, New Hampshire, Nevada and Pennsylvania.
Not if it is a wholesale lender, and most of them are. They are not licensed or staffed to take consumer applications, so there is nothing to apply to. You reach them through a licensed broker. A handful of lenders run both a retail and a wholesale division, and in those cases the retail side may or may not offer the same bank statement program the wholesale side does.
No, and the name does them no favors. These are fully underwritten mortgages subject to the same ability-to-repay rules as any other loan. The lender still has to document that you can afford the payment. It just measures your income from deposits instead of from a tax return. Every cost is disclosed on the same forms as a conventional loan.
Generally yes, and I would rather say that plainly than have you discover it at disclosure. What matters is the comparison you are actually facing, which is usually not conventional versus non-QM. It is this loan versus no loan, or versus waiting two years and buying at whatever prices do in the meantime. Many borrowers also refinance into conventional later, once their returns catch up to what the business is really doing.
Twelve or twenty-four, depending on the lender and the program. Which one helps you depends on whether your recent year is stronger or weaker than the one before it. That is worth working out before anyone pulls your credit.
Often, and it is worth more than people realize. On many programs a CPA letter stating your actual expense ratio can replace the lender’s default assumption, and on a low-overhead business that can meaningfully raise your qualifying income. If you have a CPA, loop them in early.
No, they are different products and both exist. A bank statement loan is heavily documented. You hand over twelve or twenty-four months of actual banking, so it is a different documentation method rather than an absence of documentation. A no ratio loan is the one with no income on it at all, and it is available today through a smaller set of lenders. What does not exist any more is the old stated income loan, where a borrower wrote down a number nobody verified.
You can verify any broker’s license, including mine, on NMLS Consumer Access. The CFPB’s ability-to-repay rule is the regulation that governs how every one of these loans has to be underwritten.
Want to know what your statements actually qualify you for?
Send me twelve months and I will tell you what a lender is likely to count, and which program treats your business fairly. Call or text 704-890-7168. No application needed, and if a conventional loan is the better answer for you I will say so.
Scott Hastings, NMLS #926762. Mortgages by Scott, a division of Arbor Financial Group, NMLS #236669. 121 N Main St Ste 202, Mooresville NC 28115. Equal Housing Opportunity. All loans subject to credit and property approval. Lender names on this page are referenced for informational purposes and do not imply any endorsement or affiliation. This page is general information, not a commitment to lend or an offer of credit, and no rate, term or approval is promised.
