Can You Use Bank Statements As Proof of Income For Mortgage?

12-Month Bank Statement Mortgage For Self-Deposit Wage Earners is a home mortgage program that benefits homebuyers who are self-employed entrepreneurs. Federal income tax returns and/or W-2s are not required. The income is calculated with bank statement deposits over 12 or 24 months.

Apply Now!!!

In this article (Skip to…)

Business Owners Benefit From 12-Month Bank Statement Mortgage 

12-Month Bank Statement Mortgage is ideal for business owners or self-employed borrowers who cannot qualify for a home. mortgage due to the large unreimbursed business expenses they deduct from the gross income on their federal income tax returns.

The Importance Of Income On Traditional Loans: CLN Mortgage Now Has No-Doc Loans

Mortgage underwriters will use the adjusted gross income as qualified income on government and conventional loans. Adjusted gross income is the net income after all deductions. The benefits of owning your own business and/or being self-employed are being able to deduct substantial business expenses.

Unreimbursed Business Expenses

By doing so, self-employed borrowers minimize paying a lot of taxes. However, the more unreimbursed business expenses you deduct, the lower your adjusted gross income. The lower your adjusted gross income, the lower the mortgage loan amount you will qualify for. With our bank statement mortgage program at Capital Lending Network, Inc., we do not even ask for tax returns. Income is calculated with bank statement deposits.

Can I Qualify For The 12-Month Bank Statement Mortgage Program With Negative Income?

Can I Qualify For The 12-Month Bank Statement Mortgage Program With Negative Income Whether you declare high income, low income, zero income, or negative income on your income tax returns, it does not matter. Our bank statement mortgage program at CLN Mortgage Group does not require tax returns from borrowers. There are instances where shrewd sharp business owners have negative income due to substantial losses on their income tax returns.

Negative Or Little Income On Income Tax Returns

Negative income on federal tax returns will automatically disqualify borrowers from qualifying for a mortgage. However, with our 12-Month Bank Statement Mortgage Loan Program at Capital Lending Network, little or negative income on tax returns does not matter.

Qualify today for a mortgage. Click Here!!!

How Do Mortgage Underwriters Calculate Qualified Income On Bank Statement Loans

As long as you have a business and/or personal bank statement and have regular monthly deposits, you are in great shape and should qualify. Only bank statement deposits are used to calculate qualified income. We will further explain how the 12-Month Bank Statement Mortgage Loan Program works in the following paragraphs. We will discuss and cover 12-Month Bank Statement Mortgage Loan Programs at Capital Lending Network, Inc.

How The Bank Statement Mortgage Loan Program Is Processed

For the Bank Statement Program, we would need either 12 months of bank statements or 24 months of bank statements. We offer 12-months and 24-months bank statement deposit loan programs. The difference between the 12 versus 24-month bank statement mortgage program is the 12 months loan program has a 0.125% higher pricing adjustment on the mortgage rate).

12 Versus 24 Month Bank Statement Mortgages

The eligibility requirements and guidelines are exactly the same with both the 12 months versus 24 months bank statement mortgage loan program. Income tax returns are not required so do not turn them in. Only the bank statement deposits will be used to calculate qualified income by mortgage underwriters. Withdrawals do not count.

Documents Required To Start The Mortgage Process

The following documents will be required to get started processing the bank statement loan program: Either 12 and/or 24 months’ worth of Bank Statements. ALL pages. This holds true even if there are blank pages in the bank statements. All pages need to be legible and original. If the pages are separate and somewhat confusing, please separate them and label them with the month and year. If it is one attachment, they must be in sequential order (Business they must own 50%+ of the business & personal they must own 25%+ of the business).

Qualified Income Of Borrowers

The loan officer needs to have the borrower complete the 1003 mortgage loan application with no income on it. The loan officer will analyze income. There are times when verification of employment may need to be done with borrowers with irregular income or who have irregular overtime income.  A recent tri-merger credit report of the borrower will be pulled. The middle credit score is used as the qualifying score.  A detailed bank statement questionnaire will be provided by the lender for the borrower to complete, date, and sign.

Get qualified today for a mortgage

Forms That Need To Be Completed

The questionnaire is a VERY detailed description of the business so the mortgage underwriter can determine the Expense percentage. The questionnaire must be 100% accurate (if there is anything in a review that is incorrect it would be an automatic denial). With the submission to the mortgage underwriter, borrowers will need a letter from their CPA/Accountant to verify their ownership and will need the most recent full bank statements and a Month to Date statement before closing.

Calculating Income And Expenses On Bank Statement Loans

How the calculation of income and expenses looks like

If you are using Business Bank Statements, the borrower must be at least 50% owner of the business. We will require either 12 or 24 months’ worth of bank statements. There is a business bank statement questionnaire that the borrower (not LO/processor) must complete and e-sign. The bank statement questionnaire will give a breakdown of their business. State a detail of the number of physical locations, how many employees, and what they feel the expenses that they occur for their business are as a percentage.

Mortgage Underwriting On Bank Statement Loans

The mortgage underwriter will look at that as well as other factors to determine what they will use as expenses against the business. The 4 expense % they will use are either 30%, 50%, 70%, or 90% leaving the remainder of deposits left over to determine income. If the borrower owners the business 100%, the borrower gets to use the full amount of the remaining deposits. But if they are 50% owners, then they only get to use 50%. This will then be divided by the number of months of bank statements we are using (12 or 24 bank statement deposit averages).

Case Scenario On How Income Is Calculated On The 24 And 12-Month Bank Statement Mortgage

Here is a case scenario on how income is calculated and how the bank statement mortgage program works:

Example on a 24-month bank statement mortgage income and expenses are calculated:

  • $960,000 in revenues for 24 months
  • Using 50% as Expenses leaves $480,000

They are 100% owner of the business:

  • Take the $480,000 and divide it by 24 months

Monthly income is $20,000/month. If they were 50% owner then that would be ½ or $10,000/month.

Using Personal Bank Statements

Borrowers can use personal bank statements. If the borrower is using personal bank statements, the borrower must be at least 25% owner of the business. Or the borrower needs to be a 1099 employee. If the borrower is a 1099 wage earner, the borrower needs to have been a 1099 employee for at least two-plus years with the same employer. Apply Now!!!

How Income Is Determined On Bank Statement Mortgages

The borrower can use the bank statement questionnaire again to give a percentage of what they feel their expenses are. The mortgage underwriter would apply a certain percentage against their deposits. You can only count the deposits coming into their personal account from that business account or deposited 1099 deposits (if cash/ATM deposits, then only those). We do not allow transfers from other personal accounts.

Using A Combination Of Personal And Business Bank Accounts

What are the benefits of using a combination of personal and corporate bank accounts

If the borrowers are using their personal bank statements and they have a business account and the borrowers get 2 months’ worth of business account statements, then we will allow the borrower to use 100% of their deposits. 100% of the borrower’s deposits coming into their personal account from their business can be used as income. We will take no expenses taken out against them. If you have one borrower who is Self-Employed and their spouse who is W2, you can use both income sources. This holds true as long as the Self-Employment income makes up at least 30% of the income.

12 Versus 24 Month Bank Statement Mortgages

Capital Lending Network, Inc. offers 12 and 24 months bank statement loans for self-employed homebuyers with no income tax returns and limited documentation required. The bank statement mortgage program is for self-employed borrowers. It benefits those who show little to no income or even negative adjusted gross income due to writing off unreimbursed business expenses. Get qualified for a mortgage today!!!

How Is Qualified Income Determined On Bank Statement Mortgages

The monthly bank statement deposits over the past 12 months are averaged. The average monthly deposits over the past 12 months are the qualified income that is used for debt to income ratio calculations by the mortgage underwriter. Withdrawals do not matter. For example, if the borrower makes a $10,000 deposit every month and withdraws $9,999.00 the same day, the $10,000 deposit will be used. The withdrawal and/or balance do not matter. To qualify, the borrower needs to have been self-employed for at least two years.

Bank Statement Loans Mortgage Guidelines

Capital Lending Network, Inc. has multiple wholesale bank statement mortgages, lending partners. What are the guidelines for loans with a bank statement for self-employed borrowers

Since bank statement loans are non-conforming loans, our wholesale investors can make exceptions on a per case by case basis. In general, the following terms and conditions apply to most of our bank statement mortgage loan programs. Need to be self-employed for at least two years. Provide the past twelve months’ bank statements with no bank overdrafts. There is no maximum loan limit. The minimum down payment required is a 10% down payment.

Apply Now!!!

Non-QM Down Payment Requirements

The lower your credit scores, the larger the down payment that is required. There is no private mortgage insurance required on all non-QM and bank statement loans for self-employed borrowers. Mortgage rates mainly depend on the combination of the borrower’s credit scores and the down payment. Bank statement mortgage loans are for owner-occupant primary homes, second homes, and investment properties. Minimum credit score requirements of 620 FICO. Timely rental and/or housing payments in the past 12 months. Minimum of 3 credit tradelines that have been seasoned for at least 12 months. The bank statement loan program is one of the most popular at Capital Lending Network, Inc.

Non-QM Bank Statement Loans Versus Traditional Jumbo Mortgages

What's the difference between non-QM bank statement loans and traditional jumbo mortgages
Self-employed homebuyers now have the opportunity to purchase a high-end home without worries about qualifying for a Jumbo mortgage. Traditional Jumbo lenders consider high-end homes as high risk. Many will require a 40% debt to income ratio cap and impeccable credit and a 740 credit score. They will use the adjusted gross income of the self-employed borrower. Our non-QM bank statement loan program has a minimum credit score requirement of 620 FICO.

Adjusted Gross Income Versus Bank Statement Deposits As Qualified Income

Most self-employed wage earners take advantage of the tax benefits which enables them to pay less in taxes. However, this often hurts when they apply for a mortgage. With the bank statement loan program for self-employed borrowers, self-employed borrowers can now qualify for a Jumbo bank statement loan without the need to worry about qualified income. Your deposits will be used to c qualified income.

How Does The 12 And 24 Month Bank Statement Mortgage For Self-Employed Borrowers Work

Great news for self-employed borrowers. Until non-QM and alternative mortgage loan programs were launched a few years back, self-employed homebuyers had a difficult time qualifying for a home mortgage. This was because self-employed borrowers often take substantial unreimbursed business expenses which affects the adjusted gross income. Many self-employed borrowers will have little to no adjusted gross income after deductions. Others can have a negative income.

Tax Benefits Of Self-Employed Wage Earners

Being able to take tax deductions is one of the many great benefits of being a self-employed wage earner. Unreimbursed business expenses will lower the adjusted gross income. Lower adjusted gross income means the taxpayer will pay less in federal income taxes. However, tax deductions mean lower income taxes paid but it is not good when it comes to qualifying for a mortgage.

Qualify for a mortgage today!!!

Limited Documents And No Income Tax Returns Required

With the bank statement mortgage loan program now available, self-employed borrowers can qualify for a 12 and 24-month bank statement mortgage loan program for self-employed borrowers with no income tax returns required. We will average either the past 12 months and/or 24 months of bank statement deposits and use that average as the monthly qualified income. Withdrawals do not count. Bank statement mortgage loan programs have become a very popular loan program among self-employed borrowers. In this article, we will discuss and cover 12 And 24 Month Bank Statement Mortgage For Self-Employed Home Buyers.

Apply Now!!!

Bank Statement Loan Program Explained

Capital Lending Network, Inc. now offers 12 And 24 Month Bank Statement Mortgage for self-employed borrowers:

  • No income tax returns are required
  • No private mortgage insurance is required
  • There are no maximum loan limits
  • Self-employed borrowers had a difficult time qualifying for home mortgages since the 2008 Housing Bubble Collapse due to taxable income making it difficult in qualifying for traditional government and conforming loans
  • Our 12 and 24-month bank statement mortgage now makes the dream of homeownership possible for self-employed borrowers
  • Many entrepreneurs who could have afforded higher-end homes have been renting until now

With the launch of the 12 And 24 Month Bank Statement Mortgage Program at CLN Mortgage, business owners can now qualify for home mortgages using their bank statements.

Apply Now!!!

How Is Income Calculated With Bank Statement Mortgage

On 12 and 24 months Bank Statement Mortgage Loan Programs, income is calculated by adding total deposits of either 12 and/or 24 months and averaging it by either 12 and/or 24 months. The average monthly deposit will be the qualifying monthly gross income. Withdrawals do not count. Some investors may allow 100% of the deposits to be used on personal bank statements. Some investors may only allow 50% to 70% of the deposit to be used on business bank statements. It depends on the individual lenders and/or investor and case scenario.

How Bank Statement Mortgage Lenders Process And Underwrite Loans

Bank Statement Mortgage Underwriting is rather streamlined and simple. Loan Officers need to gather borrowers’ bank statements. Underwriters will go by the ending balance of monthly bank statements.

Here is what underwriters will analyze and review when processing and underwriting bank statement mortgage borrowers:

  • All Pages Of Monthly Bank Statements And Ending Balances
  • Regular Deposits, Withdrawals, Overdrafts, Ending Balances With Special Emphasis On Deposits
  • Irregular, Unique,  And Large Deposits
  • Account Transfers, Bank Wires, ATM Advances, Abnormal Activities

Apply Now!!!

Asset Depletion Mortgage Program

Capital Lending Network, Inc. offers an asset depletion bank statement mortgage loan program. Asset depletion can be used as qualified income with our bank statement mortgage for self-employed borrowers. The following assets of self-employed borrowers can qualify for our asset depletion loan program. Asset conversion can be used for qualifying income. Qualified assets for asset depletion can be the following:

  • Liquid Stocks
  • Liquideable Bonds
  • Mutual Funds
  • Retirement accounts such as 401k
  • Savings/Checking Accounts

Depending on the loan program and investor, there is a conversion chart on the percentage of the asset that can be converted to income. Please contact us at CLN Morgage for more details at 800-900-8569 or text us for a faster response. Or email us at .

Get pre-qualified now!!!

NON-QM Bank Statement Loans

All Bank Statement Loans are non-QM loans. They are not Qualified Mortgages. There is no waiting period after a housing event and/or bankruptcy discharge date to qualify for non-QM loans. 10% to 20% down payment is required. Down payment requirements depends on borrowers’ credit scores.

Get approved for a mortgage today

Non-QM Mortgage Rates

Mortgage rates are dependent on down payment and credit scores. Need verification of rent for the past 12 months with no late payments in the past 12 months. Borrowers can qualify during Chapter 13 Bankruptcy repayment but need to have been in the repayment for at least 12 months. Need approval of Chapter 13 Bankruptcy Trustee. Need to have been self-employed for at least 2 years. 3 credit tradelines seasoned for at least 12 months. The bank statement needs to be from the same bank.

Start The Non-QM Bank Statement Mortgage Process

To qualify for the 12-month bank statement mortgage loan program, please contact us at Capital Lending Network, Inc. . The team at Capital Lending Network, Inc. is available 7 days a week, evenings, weekends, and holidays. Please don’t hesitate to reach out to us at Capital Lending Network, Inc. at 800-900-8569 to discuss helping you get qualified for our bank statement mortgage loan program. Text us for a faster response. Or email us at . The team at CLN Mortgage is available 7 days a week, evenings, weekends, and holidays.

Peter has 7+ years of experience in residential lending. He is a licensed Realtor in the Chicagoland area.


Need to get a mortgage. Self employed CA solar electrical contractor. High student loan debt to income ratio but on income based program and pay 0 on loans per program. I like to qualify for bank statement loan at Capital Lending Network.
First time buyer. Need someone to go to bat for us.

Hello: We bought our home 3 months ago. I dismissed my bankruptcy in April due to the payments going from $400 to $600, which I could not afford. I have 48 months of on time payments for the bk. The seller is carrying the note for us at 6%, and we would like to refinance for a smaller interest rate. Thank you for your help.

I am in a chapter 13 bankruptcy have been since 12/2018. I am currently renting at $900 monthly this is not a part of my Bankruptcy all payments have been made on time. The property is being sold and I am now looking to move and I no longer want to rent. I have not spoken with my bankruptcy because I am exploring my options now. Please advise if you have any advice.

I believe I spoke to someone here several months ago about getting approved for a VA Loan with a Charge Off. I was told to wait until November then reach back out about getting approved so that the charge off would be older and more likely to not stop me from getting approved.


I am a CA resident who owns investment rental properties in TX. I recently purchased a duplex and a 4-plex with all cash. I would like to use delayed financing to get 75% back out of my duplex, and possibly the same arrangement for my 4-plex. To save us all time, I need to know:

1. Do you do delayed financing loans in TX?
2. If so, what are your rates and terms for someone with excellent credit well north of the 760 dividing line, strong W2 income, proven source of funds, and strong debt-to-income ratio?
3. Both of these prospective delayed financing loans are FNMA eligible since I only have two other rental mortgages. (I own three other rentals, all single-family homes, but one is owned outright, one is mortgaged but my equity is above 30% of value, and the other is also mortgaged but my equity is somewhere around 30% of value.) I also have a mortgage on my primary residence, with my equity stake being 34-35% of most recent appraised value.
4. The prospective loan amount listed above is for less than 75% of value of the duplex, which is in Austin area. The loan amount for the 4-plex would be less since it is in a different area of TX. That would probably in the $180k-$185k range.

My best contact is via my email address because I work long hours (does not work when I am home since I live in the foothills),

Info on VA Home Loan Denials after an AUS Accept, 10 yrs on job, 6 years at current residence, Middle score 619, under 41% DTI, exceeds residual income requirement, appraisal completed, approved payment plan for student loans that were in default (payment falls well w/in DTI & Loan), CAIVRS not clear from student loans. *Per VA CAIVRS is only a factor I’d the federal loan was connected to VA LOAN. Since it’s connected to Student Loans and a payment plan is in place the only factor is counting the payment against DTI. The file was sent up for a week and a half for final and after not hearing anything attempted to reach out to the Lender to tell me they received a decision late that night that it was denied due to mortgage payment and history. I don’t have a mortgage and in fact sent them VOR for 3 months to then have the excuse of a typo and that there has to be 12 months of positive pay history after derogatory credit, not true. No BK’s or Foreclosures (EVER). Any information you can give me would be greatly appreciated! Thank you and the loan is in Georgia.

I was just denied mortgage loan with Wells Fargo after having an approval letter. I own an auto repair and maintenance business so even though I receive W2 reported salary Wells Fargo said they had to deduct the business losses reported on the 2019 corporate tax return from my income even though my corporation is a C corporation. Wells Fargo had me spend money on an appraisal, survey, a licensed structural engineering report and several other items before they denied mortgage. I am 100% owner of the business and bought the business in 2002. January 2020 I started drawing Social Security spousal benefits and lowered my salary to $15,000 a year so as not to have to pay back any of the Social Security benefit that I am drawing monthly. In October 2020 I raised my salary to 18,000 which is closer to the limit I am allowed to earn before they cut part of my benefit. I am interested in finding out if your company might be able to approve me for mortgage loan. How long does your process take? My credit scores were in the 800 to 806 range when I checked earlier today.

Patricia Cilia

Hello, looking to refinance my non QM loan to an FHA loan. Deed in lieu three years ago following divorce from evil person. Have had my current mortgage for a little over one year, put 20% down.
Thank you!


We are looking to acquire a site in this niche. We have a budget of $2,000 – if this interests you can you please get back to me.

We’re willing to show proof of funds and use an escrow service to ensure a clean handover.

If you’re interested we would require a bit more information for our due diligence.


Hello. I found your name on a forum. You seem to have a good grasp on the current guidelines.

I am curious to find out if I can qualify for a loan. I declared a bk chapter 7 in September last year. The discharge date was 12/24/19 I was self employed and I was forced into bankruptcy due to outside factors that were out of my control. I ran an online business and due to my ability to market my website being taken away I lost all my income.

I am now a w2 employee. I have been with the company for over a year. My currently paystub is over 100k w2 so far, salary 75k and the other is commission with a 2k a month minimum. My DTI would be low. I don’t have any debt anymore. No car payments or credit card. Just my house loan which I was never late on. I would want to sell my house and use bulk of the proceeds for down payment.

I also own my current home with has roughly 70k in equity.

I am curious would I qualify ? Currently scores mid 600’s. Definitely the middle score will be over 640.

I live in new York. Upstate ny. Would I qualify and if so, what type of down payment?

Would I qualify under fha extenuating circumstances?


You will qualify for non-qm loans with us but unfortunately we are not licensed in New York. I will refer you to my Associate Eric Jeanette who may have someone in New York. What is your number?

I’ve been working on my credit for 2 years. I do have an eviction on my report from a landlord that was a scum lord. We moved into a house that wasn’t even livable and I did work to pay off rent. When he refused to pay a reasonable amount of money for a repair, he started eviction process. He also went after us for damages on this property that was already in disarray. Now, I have the judgement on record. I want to buy my first home and can’t because of my situation. Please help

We own a SF rental property in Texas free and clear. Property will appraise around $410,000; looking for $150,000 cash out refi. LTV 37%. Rent role is $1,600/month.
Would prefer no doc, fixed rate, 30 yr amortization, no escrow; rental income can easily pay first mortgage. What if anything can you offer?
Thank you, Henry

I am in need of a home loan. I am one year out of bankruptcy. I have a large downpayment. I read about your non qm mortgages. Thanks !

I am currently in my 14th month of a 60 month Chapter 13. All payments have been made on time. My current home is financed through my credit union but there is a balloon payment due Feb 10, 2021 for the full amount owing on the mortgage which is $68,000. I have tried to go through my credit union to re-finance but due to the Chapter 13 they will not be able to re-finance for 4 years after the discharge date. I am panicked because if I loose my house me and my daughter will be homeless. I have tried several times to contact my attorney who handled the Chapter 13 but he has not returned any calls, texts nor emails. I believe my credit score is around 630 right now and all of my payments on the current mortgage are current along with another loan that I have through the same bank. Is there anything you can do to help me – I don’t know what to do.

Jennifer Anne Burke

Currently owe 160k for a 2 family house with an estimated value of $320k. I am looking for a no income verification line of credit of $100k to purchase an investment property.

Hello. I’m interested in a FHA 203k refinance. My current mortgage I’m sitting right under 170k owed. As far as equity If the Zillow zestimate is to be believed then it says the property is worth 243k. As far as how much in renovations we want to do it really depends on how much we qualify for. We want to do a pretty extensive remodel on top of replacing dated HVAC units. So I would say at least 50-75k.

Rental property with a prepaid mortgage until 9/1/2021 Payment then is 4200 Primary mortgage $4780-9.99% Rental income $4800 currently being advertised ($3900 previous tenant) Monthly gross $6K
Property taxes & insurance paid separately

Hey just had a quick question to run by you,

Dana Ronald here from The Tax Crisis Institute. I’ve been helping people deal with state and federal tax issues for more than 30 years. Hope you’re keeping safe during these turbulent times.

Coincidently, I wrote a very detailed guide on a similar topic (What are Capital Gains Tax). I was wondering if you could reference and link to my article as well (since it’s up to date and extensively researched). I’m quite certain your readers will appreciate the updated reference and it would be a great addition to your already fantastic piece.

My husband has a VA loan letter and a 0 credit score, I have a 700 credit score but on SSI. Can he still get a VA mortgage on a house in NY? If you can help please get in touch with me. Thankyou-Debby

I have a score of 560 and really want to buy a home it is poor due to a judgemnet and a student loan that is paid off monthly can i still qualify

I am looking for a way to get a loan to pay off unpaid property taxes. I do not currently have a mortgage on my home, I own it outright.

Leave a comment

Your email address will not be published.