Articles

How Bank Statement Loans Work: 2025 Guide for America's 10 million Self-Employed Borrowers

Written by Darrin Seppinni | Jun 30, 2025 9:12:26 PM

What is a Bank Statement Loan?

A Bank Statement Loan—also called a Bank Statement Mortgage—lets self-employed borrowers qualify with 12–24 months of bank statements instead of tax returns or W-2s.

Ideal for:

  • Small-business owners
  • Entrepreneurs
  • Freelancers & gig-economy workers
  • Independent contractors

For these borrowers, the program evaluates actual cash flow rather than tax-restricted paperwork—offering a smarter route to approval.

 

Why Traditional Income Docs Fall Short —

and Why Demand Is Rising

Tax returns often understate self-employed income because of legal deductions and fluctuating revenue. Conventional underwriting can therefore misrepresent a borrower’s true ability to repay. Bank Statement Loans solve this by measuring real deposit-giving lenders with a clearer picture of sustainable earnings.

The trend: America’s independent workforce keeps expanding. In 2024, 72.7 million people—about 42 percent of the U.S. workforce—earned income as independent workers mbopartners.com. By May 2025, roughly 10 million workers were classified as unincorporated self-employed in the Bureau of Labor Statistics’ household survey, returning to pre-pandemic highs bls.gov. More borrowers than ever therefore need income-flexible mortgage options.

 

 

Conclusion: Empowering Self-Employed Borrowers

Bank Statement Loans recognize the complexity—and strength—of self-employed income. By relying on verifiable cash flow rather than heavily written-off tax returns, these loans level the playing field, giving entrepreneurs, freelancers, and independent contractors access to the same home-ownership opportunities as W-2 employees.

 


 

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

 



 

Call HomeLife Mortgage now and let us help you get pre-approved now!

 

 

If you’re hungry for more insights, be sure to check out our other blog posts and subscribe to our YouTube channel for even more tips and tricks.

 


The Ultimate Guide to Bank Statement Loans eBook

Download our free eBook to learn the ins and outs of Bank Statement loans and everything you need to know to apply and qualify for your loan.

 

 

More Content For You:

Bank Statement Loan Refinance Cash-Out: Reap the Benefits

Bank Statement Loans for Florida's Self-Employed: Rates just Dropped

#1 Trusted Source for Bank Statement Loans in California

Questions?

Click the live chat window on our site or call (888) 677-2526.  Our team is ready to assist you!

About HomeLife Mortgage

For more than 25 years, HomeLife Mortgage has built a strong reputation in California and Florida as a leading mortgage broker, servicing the needs of borrowers who have been unable to obtain conventional financing.  HomeLife Mortgage is at the forefront of non-bank lending offering the next generation of mortgages including Jumbo Loans, Real Estate Investor Loans, and Bank Statement Loans.