Bank Statement Loans
Bank Statement Loans
A bank statement loan is a mortgage without tax returns, designed for self-employed borrowers in Arizona who don't fit traditional income documentation. Instead of tax returns or W-2s, you qualify using 12 or 24 months of personal or business bank statements. It's a common solution for business owners whose tax write-offs make their income look lower than it really is.
Key Requirements & Features
Below are the typical bank statement loan requirements we see from our lender network:
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Minimum credit score: 640 for most programs, with options as low as 620 through select lenders
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Down payment: Depends on your credit score:
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720+ credit score: as low as 10% down
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640-719 credit score: typically 15-20% down
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620-639 credit score: 25% down
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Loan amounts: Up to $4,000,000
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Income documentation: 12 or 24 months of personal or business bank statements, in place of tax returns or W-2s
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Income calculation: A standard 50% expense factor is applied to business bank deposits. It can often be lowered with a third-party business expense letter or a profit & loss (P&L) statement, which means more qualifying income
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Debt-to-income (DTI) ratio: Up to 55%, depending on the overall loan profile
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Self-employment history: At least 1 year
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Reserves: Minimum of 3 months
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Credit events: Bankruptcy or foreclosure allowed after 12 months
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Cash-out refinance: Available up to 80% loan-to-value (LTV)
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Loan terms: 30-year fixed, 5/6 ARM, 7/6 ARM, 2-1 buydown, and a 40-year interest-only option
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Borrower eligibility: U.S. citizens, permanent residents and non-permanent residents
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Property types: Primary residences, second homes, and investment properties may all qualify
Who Bank Statement Loans Are Best For
Bank statement loans tend to be the best fit for self-employed Arizona borrowers if you:
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Are self-employed, a small business owner, or a 1099 contractor
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Have tax returns that don't reflect your full earning power because of write-offs and deductions
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Have strong, consistent bank deposits but can't document income the traditional way
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Are recovering from a bankruptcy or foreclosure that's at least 12 months behind you
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Want to buy a primary residence, second home, or investment property without W-2 income documentation
Not the best fit if: you have full W-2 income and tax documentation readily available and prefer the simplest possible paperwork. A conventional or FHA loan may involve less documentation. That said, our bank statement loan rates are often competitive with conventional pricing, so it's worth comparing both.
Frequently Asked Questions
What is a bank statement loan?
A bank statement loan is a mortgage for self-employed borrowers that uses bank deposits instead of tax returns to verify income. It's helpful if your tax write-offs make your income look lower than what you actually bring in.
Can I get a mortgage without tax returns if I'm self-employed?
Yes. Bank statement loans qualify self-employed borrowers using 12 or 24 months of bank deposits instead of tax returns. You'll need at least 1 year of self-employment history.
What are the requirements for a bank statement loan in Arizona?
You'll typically need a credit score of 640 or higher (620 through select lenders), at least 1 year of self-employment, 3 months of reserves, and 12 or 24 months of bank statements showing consistent income. DTI can go up to 55%.
How much down payment do I need for a bank statement loan?
It depends on your credit score. Borrowers with a 720+ score can put down as little as 10%, scores of 640-660 typically need 15-20%, and a 620 score requires 25% down.
How many months of bank statements do I need?
You can choose between 12 and 24 months. Which one works better depends on how your deposits look over time. We'll review your statements and help you pick the option that qualifies you for the most.
How much can I borrow with a bank statement loan?
Loan amounts go up to $4,000,000 through our lender network, depending on your credit score, down payment, and property type.
How is my income calculated on a bank statement loan?
For business bank statements, lenders typically apply a standard 50% expense factor to your deposits. If your actual expenses are lower, a third-party business expense letter or a P&L statement can reduce that factor and increase your qualifying income.
Can I get a bank statement loan after bankruptcy or foreclosure?
Yes. Our lender network allows bank statement loans 12 months after a bankruptcy or foreclosure, which is much shorter than the waiting periods on many conventional and government loans.
Can I do a cash-out refinance with a bank statement loan?
Yes. Cash-out refinances are available up to 80% loan-to-value.
What loan terms are available?
Options include a 30-year fixed rate, 5/6 and 7/6 adjustable-rate mortgages (ARMs), a 2-1 buydown to lower your payments in the first two years, and a 40-year interest-only option.
Do bank statement loans have higher rates than conventional loans?
Alternative loans often carry higher rates when you go through a single lender. Because we compare options across our network of lenders, we're frequently able to find bank statement loan rates that are competitive with conventional pricing. We'll show you real numbers so you can compare for yourself.
How do I get started with a bank statement loan in Arizona?
As a licensed Arizona mortgage broker, we compare bank statement loan options across our network of lenders. Reach out for a free consultation to discuss your self-employment income.
Ready to See Your Options?
Tell us a little about what you’re looking for, and one of our Arizona loan officers will reach out. No pressure, just options.
