Are you self-employed and struggling to qualify for the home you really want—despite strong income from your business? You’re not alone. Many entrepreneurs run into issues with traditional mortgage lenders because they deduct legitimate business expenses on their tax returns, which lowers their qualifying income on paper.
As a mortgage broker helping self-employed clients across North Carolina, South Carolina, and Florida, I specialize in alternative mortgage solutions—including bank statement loans. If your local bank has told you that you don’t qualify or only approved you for a smaller loan than expected, don’t give up. You may have better options than you think.
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Why Traditional Mortgages Don’t Work for Many Self-Employed Borrowers
If you’re self-employed, you likely take full advantage of the tax code—writing off business expenses to reduce your taxable income. The problem is, mortgage underwriters base your loan qualification on net taxable income, not your gross earnings.
So even if your business brought in $200,000 last year, but you wrote off $140,000 in expenses, lenders only count $60,000 as your income—which may not get you the loan amount you need.
That’s where bank statement mortgages come in.
What Is a Bank Statement Mortgage?
A bank statement mortgage is an alternative loan product designed specifically for self-employed borrowers. Instead of looking at tax returns, lenders evaluate your income using 12 to 24 months of business bank statements.
Here’s how it works:
- The lender totals your business deposits over 12–24 months
- Transfers between accounts do not count—only actual income deposits
- Typically, they use 50% of total deposits to estimate your income, assuming the other 50% covers your business expenses
- That number is used as your qualifying income
Example:
If your business brings in $500,000 in deposits over the past year, lenders will use $250,000 (50%) as your annual income. Divided by 12 months, that’s $20,833/month of qualifying income.
Ownership Percentage Matters
Lenders will also require a letter from your CPA verifying your percentage of business ownership:
- If you own 100% of the business: you use 100% of the calculated income
- If you own 50%: you only use 50% of the income figure
So in the example above, if you’re a 50% owner, only $10,416/month would count toward your mortgage qualification.
What Are the Requirements?
To get a bank statement loan, here’s what you’ll generally need:
- Minimum 10% down payment (some lenders may require more)
- Good credit
- CPA letter confirming business ownership
- 12–24 months of business bank statements
- Proof of consistent deposits (not just one big month)
What About Interest Rates?
Bank statement mortgages usually come with slightly higher rates—about 1% to 1.5% higher than traditional loans. This is the tradeoff for skipping tax return requirements and using a more flexible income calculation.
Is a Bank Statement Mortgage Right for You?
✅ You’re self-employed and have strong business revenue
✅ Your tax returns don’t reflect your true income
✅ You’ve been turned down or limited by traditional lenders
✅ You’re willing to put at least 10% down
✅ You can provide consistent business bank deposits for 12–24 months
If this sounds like you, a bank statement mortgage could be the key to buying the home you actually want—not just what your taxes say you can afford.
FAQ: Bank Statement Loans for Self-Employed Borrowers
Do bank statement mortgages require tax returns?
No. Lenders are not allowed to use your tax returns—only your business bank statements.
How many months of statements are needed?
Most lenders ask for 12 to 24 months of business bank statements.
What kind of business income counts?
Only actual income deposits. Transfers between accounts do not count toward qualifying income.
Can I use personal bank statements?
Some lenders allow it, but business statements are preferred. If using personal accounts, be prepared to prove that deposits are from business activity.
Do I still need a CPA letter?
Yes. A CPA must verify your business ownership percentage, which affects how much income can be counted.
If you’re self-employed and want to explore whether a bank statement mortgage is right for you, contact me today. I’ll walk you through the process and help you get qualified based on what you actually earn—not just what’s on your tax return.