For many self-employed individuals and business owners, traditional mortgage qualification criteria can present roadblocks. That’s where bank statement mortgage programs come in, offering a flexible, documentation-light solution for borrowers with non-traditional income sources. In this installment of our Bank Statement Loan Series, we explore who qualifies for this type of loan and what documentation is required to get started. If you haven’t read the first two installments in this series, start here.

Who is Eligible for a Bank Statement Mortgage?

Bank statement loans are designed specifically for borrowers who may not have standard documentation like W-2s or tax returns but can demonstrate consistent income through their bank activity. This program is especially ideal for:

• Self-Employed Individuals: Including sole proprietors, freelancers, gig workers, and 1099 earners.
• Business Owners: Those running LLCs, corporations, or partnerships with variable monthly income.
• Commission-Based Earners: Sales professionals or contractors who are paid irregularly.
• High Net-Worth Borrowers: Who may not show significant taxable income but maintain strong cash flow.

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Basic Eligibility Requirements

To qualify for a bank statement mortgage through Pacific Home Loans, borrowers typically need to meet the following criteria:

• Self-Employment Duration: At least 2 years of self-employment or business ownership is usually required. Some lenders may allow as little as 12 months with strong compensating factors.
• Credit Score: A minimum credit score of 620 is generally needed, though higher scores (700+) may improve your loan terms.
• Down Payment: Down payments start as low as 10%, but this can vary depending on your credit profile, loan amount, and property type.
• Loan Amounts: Available for both conforming and jumbo loan sizes, often up to $5,000,000.
• DSCR Consideration (If Applicable): For investment properties, lenders may review the debt service coverage ratio (DSCR) to ensure the property generates sufficient income to cover the mortgage.

Documentation Requirements

Instead of tax returns and W-2s, you’ll provide:

1. Personal or Business Bank Statements (12 or 24 months):
   • Personal bank statements may be used if all income is deposited into a personal account.
   • Business bank statements often require a Profit & Loss (P&L) statement prepared by a CPA, accountant, or borrower (in some cases).
   • Lenders will analyze average monthly deposits to determine qualifying income.
2. Profit & Loss Statement (if using business statements):
   • Helps to reconcile deposits with business expenses and validate income.
   • Must align with the deposits shown in the bank statements.
3. Business License or CPA Letter:
   • Verifies business ownership and length of time in operation.
   • A CPA letter may also be required to confirm business expenses and income structure.
4. Valid ID and Mortgage Application:
   • Standard items like a driver’s license, credit authorization, and completed loan application are part of the package.

Final Thoughts

Bank statement loans offer a powerful alternative for qualified borrowers who fall outside the traditional income verification model. By using your actual bank deposits to demonstrate financial capability, you can unlock homeownership or investment opportunities that might otherwise be out of reach.

At Pacific Home Loans, we specialize in helping self-employed and entrepreneurial clients across Hawaii, California, Colorado, Washington, Texas, and other licensed states secure financing that fits their unique needs.

Ready to see if you qualify?
Contact Pacific Home Loans for a personalized consultation and discover how a bank statement loan can work for you. Or, to get started even faster, apply online now!

Read the other posts in this series:

Part 1. Unlocking Homeownership: Introducing the Pacific Home Loans’ Bank Statement Mortgage Program

Part 2. Understanding the Bank Statement Mortgage Program: A Closer Look at How It Works

Stay tuned for our next post in the Bank Statement Series: Bank Statement vs. Traditional Mortgages – A side-by-side comparison