Bank statement loans for self-employed DFW buyers
Your tax returns show what you wrote off, not what you earn. A bank statement loan qualifies you on your actual deposits, so business owners, 1099 contractors, and realtors can buy without fighting their own write-offs.
Why your bank said no (and why that isn't the final answer)
Traditional loans qualify you on the net income from your tax returns. If you're self-employed, that number is lower than what you actually make, because every legitimate write-off reduces it. Good for taxes, bad for qualifying.
A bank statement loan takes a different approach. Instead of tax returns and W-2s, the lender looks at 12 or 24 months of business or personal bank statements, applies an expense factor, and uses that as your qualifying income.
Getting turned down by your bank doesn't mean you can't buy a home. It usually means you need a lender that offers a different program, and that's what a broker is for.
Who this works for
- Business owners and LLC members who write off a lot
- 1099 contractors, freelancers, and consultants
- Realtors and other commission-based earners
- Trades: contractors, roofers, electricians, landscapers
- Anyone whose income doesn't fit neatly on a W-2
How bank statement loans typically work
Bank statement loans work for primary homes, second homes, and investment properties. Exact requirements (credit score, down payment, reserves, how expenses are calculated) vary by lender. That's the point of shopping 50+ wholesale lenders: the same file can price very differently from one lender to the next.
The honest trade-offs
| Bank statement loan | Conventional loan | |
|---|---|---|
| Income proof | 12-24 months of deposits | Tax returns and W-2s |
| Down payment | Typically 10% | As low as 3-5% |
| PMI | None | Required under 20% down |
| Rate | Usually higher | Usually lower |
The trade-off is a bigger down payment and a higher rate. In exchange, you qualify on what you actually earn, and there's no monthly mortgage insurance, which narrows the payment gap more than most people expect. For many self-employed buyers that's the right move. It gets you into the home now, and you can refinance into a conventional loan later if your tax returns start to show more income.
If your returns already show enough income for a conventional loan, I'll tell you. You shouldn't pay for flexibility you don't need.
What I'll need from you
Business or personal accounts, all pages.
Usually two years, shown with a business license, CPA letter, or similar.
Recent statements for the accounts you're using.
15 minutes so I can tell you which lenders fit your situation before anyone pulls credit.
Common questions
Can I get a mortgage if I'm self-employed and my bank turned me down?
Yes. Banks usually qualify you on tax-return income, which is reduced by your write-offs. A bank statement loan uses 12-24 months of deposits instead, so many self-employed buyers who were turned down by a bank can still qualify.
How much do I need to put down on a bank statement loan?
Typically 10%, depending on the lender, your credit score, and the property type. That's more than the 3-5% minimum on a conventional loan, but bank statement loans don't carry PMI. I'll compare options across 50+ wholesale lenders to find the best fit.
Do bank statement loans have PMI?
No. Bank statement loans don't require private mortgage insurance, even with less than 20% down. That helps offset the higher rate compared with a conventional loan that requires PMI.
Are bank statement loan rates higher?
Usually, yes. Bank statement loans are non-QM loans and generally price higher than conventional loans, though having no PMI narrows the payment difference. Many buyers use one to purchase now and refinance into a conventional loan later once their tax returns support it.
Can I use personal or business bank statements?
Either, depending on the lender. Business statements typically have an expense factor applied to deposits, while personal statements may count deposits more directly. I'll help you figure out which gives you the stronger qualifying income.
Can I use a bank statement loan for an investment property?
Yes, many lenders allow bank statement loans for primary homes, second homes, and investment properties. For rentals, a DSCR loan that qualifies on the property's rent may also be an option.
I'm Matthew Parra, a mortgage broker with Hometown Lending based in Mansfield, TX. I've been originating loans in DFW since 2020 and shop 50+ wholesale lenders for every client. Rated 5.0 on Google. Read my reviews →
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