What is Bank Statement Loan?
A bank statement loan is a mortgage that qualifies self-employed borrowers using bank statements to verify income instead of tax returns or pay stubs.
A bank statement loan is a type of non-qualified mortgage that allows self-employed borrowers to verify income through bank statements, typically twelve or twenty-four months, rather than tax returns or wage statements. Borrowers use it when tax deductions lower their reported income, making traditional qualification difficult. Watch for higher interest rates and fees, larger down payment requirements, and stricter credit score minimums. Lenders may require reserves and may average deposits or use a expense factor to estimate income. These loans are not for everyone, and comparing offers from multiple lenders is important.
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