Bank statement may fit when
- Your tax returns show low income because of lawful write-offs
- Your business deposits are steady or growing
- You have a down payment and some reserves
- A lender already said no based on tax returns alone
Self-employed mortgage education
Bank Statement Loans for Self-Employed Buyers
Dr. Rob McNeill, a licensed Texas mortgage loan originator (NMLS 844916) in Houston, helps self-employed buyers and business owners in Houston, Katy, Sugar Land, Missouri City, and Fort Bend County qualify for a mortgage using 12 or 24 months of bank statements instead of tax returns.
How it works
Deposits tell the story your tax return can't.
A bank statement loan uses 12 or 24 months of deposits to establish income instead of tax returns. It exists for business owners whose lawful deductions make the returns look thinner than the business actually is. The lender applies an expense factor or a CPA letter to business deposits, verifies the business is real and operating, and underwrites the rest of the file the normal way: credit, down payment, reserves, and the property.
Dr. Rob reviews the statements before anyone orders credit, so you know whether the deposits support the price range you have in mind.
Typical requirements
What most programs look for
- Two years self-employed in the same business, sometimes less with a prior history in the field
- 12 or 24 months of personal or business bank statements
- Credit score usually 620 to 660 and up; better pricing above 700
- Down payment usually 10 to 20 percent; some programs lower with reserves
- Reserves of a few months of payments
- Deposits that are business income, not transfers or loans
Requirements change by lender and program. Dr. Rob confirms current terms for your file.
Conventional may fit better when
- Two years of returns support the income you need
- You want the lowest available rate and PMI options
- Your down payment is under 10 percent
- Your business is new but you have prior W-2 history in the field
Who this is for
Houston business owners who earn well and report carefully.
Contractors, truck owner-operators, salon and barbershop owners, consultants, realtors, medical and dental practice owners, landscapers, restaurant owners, and anyone paid on a 1099 across Houston, Katy, Sugar Land, Missouri City, Cypress, and Fort Bend County.
Common questions
What buyers ask before applying.
Should I use 12 or 24 months of bank statements?
Twelve months is often enough when deposits are steady. Twenty-four months can help when income rose recently or had a slow stretch. The program decides what is allowed; the file decides what is smarter.
Do you use personal or business bank statements?
Either can work. Business statements usually carry an expense factor or a CPA letter to estimate what is left after costs. Personal statements that receive business income can be simpler when the business pays you on a regular schedule.
How is my income calculated from deposits?
The lender totals eligible deposits over the period, removes transfers, loans, and non-business money, applies an expense factor if business accounts are used, and divides by the number of months. That monthly figure is the qualifying income.
What credit score and down payment do bank statement loans require?
Most programs start around 620 to 660 with 10 to 20 percent down, and pricing improves as both rise. Some allow lower scores with larger down payments or reserves. Dr. Rob confirms current requirements before you shop.
Are bank statement loans more expensive than conventional?
Usually the rate is somewhat higher because the lender takes more documentation risk. If your tax returns support the income, conventional is typically cheaper. Dr. Rob runs both before recommending either.
Can a newer business qualify?
Sometimes. Many programs want two years in business, but some accept one year with prior experience in the same field. A formal review is required.
Do you work with buyers in Katy and Fort Bend County?
Yes. Dr. Rob is licensed across Texas and works with self-employed buyers in Houston, Katy, Sugar Land, Missouri City, Richmond, Cypress, Pearland, and the rest of Fort Bend and Harris County by phone, video, or in person.
Your next step
Find out which conversation to have first.
The free readiness report takes a few minutes, with no hard credit inquiry and no sensitive documents. It does not determine approval.