Bank Statement Loans

How do bank statement loans calculate my income?

Lenders review 12 to 24 months of bank statements and calculate your average monthly deposits. For personal bank statements, typically 100% of deposits are counted. For business bank statements, an expense factor (usually 50%) is applied, meaning 50% of deposits are counted as income. The specific calculation varies by lender and program.

What credit score do I need for a bank statement loan?

Most bank statement loan programs require a minimum credit score of 620-660, though some programs may accept scores as low as 600 with a larger down payment. Borrowers with higher credit scores will qualify for better rates and terms. A score of 700+ will give you access to the most competitive pricing.

Can I use business bank statements or only personal?

Both are accepted. You can use personal bank statements, business bank statements, or a combination. Business bank statements typically have an expense factor applied (usually 50%), which means lenders count only a portion of deposits as income. Personal bank statements generally count 100% of deposits. Your loan officer can advise which option works best for your situation.

How much down payment is required?

Bank statement loans typically require a minimum down payment of 10-20%, depending on the loan amount, credit score, and property type. Larger loan amounts and investment properties generally require higher down payments. Putting more money down can also help you qualify for a lower interest rate.

Are bank statement loan rates higher than conventional rates?

Yes, bank statement loans generally carry interest rates that are 0.5% to 1.5% higher than comparable conventional loans. The premium reflects the additional risk the lender takes by not using traditional income documentation. However, for borrowers who cannot qualify with tax returns, the slightly higher rate is well worth the access to financing.