Bank statement loans: More mortgage options for self-employed buyers and homeowners as rates ease

How Non-QM bank statement loans help self-employed borrowers qualify as mortgage rates soften

If you’re self-employed, paid on commission, or run a business, you already know the frustration: you can have strong cash flow, great credit, and real assets—yet a traditional mortgage can still feel like a square peg in a round hole.

That’s exactly why bank statement loans exist. They’re designed for borrowers whose real income is easier to see in deposits and cash flow than in W-2s or “perfect” tax returns. Instead of relying only on pay stubs and W-2s, these programs use recent bank statements to document income and help qualified buyers and homeowners move forward. 

And timing matters: mortgage rates have been hovering near 2025 lows. Freddie Mac’s weekly survey put the average 30-year fixed at 6.22% (Dec 11, 2025), down from 6.60% a year earlier—a meaningful shift for both purchase and refinance conversations.

What is a Bank Statement Loan?

A bank statement loan is a mortgage that allows you to qualify using bank statements (often 12–24 months) rather than only W-2s, pay stubs, or tax returns. It’s commonly used by self-employed borrowers, business owners, 1099 earners, and commission-based professionals. 

This is typically offered as part of the Non-QM (non-qualified mortgage) space—meaning the loan doesn’t fit the standard “agency/QM” box, but it can still be a responsible option when documented correctly. 

The big advantage:
flexible (and realistic) income analysis

Traditional underwriting often looks at tax returns and can discount income heavily because of legitimate business write-offs. Bank statement lending is built for the real world: it evaluates cash flow.

Common approaches include:

• Reviewing deposits over a set window (often 12–24 months)
• Using personal statements, business statements, or both (program-dependent).
• Applying an “expense factor” (a standardized percentage) to estimate usable income
• Allowing strong compensating factors (assets, reserves, credit, equity) to strengthen the file

The result: many borrowers who look “light” on paper can still qualify prudently based on what they actually earn.

Bank statement loans for buying a home

A bank statement loan can be a strong solution if:

• you’re self-employed and write off a lot
• you have stable deposits but inconsistent “taxable income”
• your business is healthy, but your tax returns don’t reflect your true cash flow
• you’re shopping in a high-cost market where payments are the hurdle (not willingness to pay)

 

If rates move down even slightly, the monthly payment difference can be meaningful—especially in high-balance and jumbo loan sizes that are common in many metro areas nationwide.

 

Bank statement loans for refinancing

Refinancing may be worth exploring if you want to:

 

reduce your rate and payment (when pricing improves)

 

consolidate high-interest debt into one housing payment (when appropriate)

 

switch from an adjustable structure to a fixed structure for stability

 

restructure the term for better monthly cash flow (program dependent)

 

Even when rate savings aren’t huge, restructuring the loan (term, IO period, ARM vs fixed) can sometimes improve cash flow—especially for borrowers with variable income.

 

A quick note on expectations

Bank statement and Non-QM loans can be excellent tools—but they’re not “magic.” You should still expect:

• underwriting documentation (just different documentation)
• guideline requirements that vary by lender
• pricing that depends on credit, equity/down payment, reserves, and overall risk

A strong file presentation matters. The right originator will help you package income clearly and choose the program that fits the scenario.

The takeaway

The mortgage world is evolving—slowly—but it is evolving. With rates near 2025 lows and more product flexibility available, self-employed borrowers have more paths to homeownership (or a better mortgage) than they’ve had in years.

A bank statement loan can turn “I don’t qualify” into “here’s how we do it responsibly.” The key is smart structure, clean documentation, and choosing the right program for your goals.

Disclaimer

This article is for educational purposes only and is not a commitment to lend or a guarantee of approval. Mortgage rates, terms, and program availability change frequently and vary by borrower qualifications, property type, and lender guidelines. Always consult a licensed mortgage professional to review your specific scenario.

About the Author

Darrin J. Seppinni is President of HomeLife Mortgage and a published author with more than forty years in the mortgage industry. He specializes in non-traditional programs—including Bank Statement Loans, DSCR Loans, and No-Doc Loan solutions—that serve self-employed borrowers and real-estate investors.

Contact
Email: darrin@homelifemtg.com | Phone: 949-681-7280