Estimated Qualifying Income
$12,500
per month
Max Housing Payment (45% DTI)
$4,825
Est. Max Loan (P&I share)
$500,000
This calculator is for estimation only, using figures you enter and typical program treatments. Actual qualifying income depends on the lender's deposit analysis, eligible deposits, expense factor documentation, and full underwriting. The max payment estimate reserves roughly 25% of it for taxes and insurance, which vary by property. Not a loan offer or a commitment to lend. Contact a licensed mortgage loan originator for numbers specific to your situation.
How Bank Statement Income Is Calculated
Bank statement loans replace tax returns with your actual deposits. The lender averages 12 or 24 months of eligible deposits, then adjusts for the account type:
Business account: Income = Avg Deposits × (100% − Expense Factor) × Ownership %
Personal account: Income = Avg Deposits × Ownership %
Worked example: a contractor's business account averages $25,000 per month in deposits. At the standard 50% expense factor with 100% ownership, qualifying income is $12,500 per month, or $150,000 per year, regardless of what the tax return shows after write-offs. If a CPA letter supports a 30% expense factor instead, the same deposits qualify $17,500 per month. That swing is why program selection matters more on these loans than on any conventional file.
Why Write-Offs Don't Hurt You Here
Self-employed borrowers get punished by conventional underwriting for doing exactly what their CPA tells them to do: maximize deductions. A business producing $300,000 in revenue can legally show $60,000 of taxable income, and a conventional lender qualifies you on the $60,000. Bank statement programs look at the money actually flowing through your accounts instead. The trade is a somewhat higher rate and down payment than conventional; the win is qualifying for the home your business actually supports. Full program details are on our bank statement loans in Houston page, and if you're comparing paths, the loan programs hub covers every option we broker, including DSCR loans for rental purchases, which skip personal income entirely.
What Moves Your Number
- Expense factor. The single biggest lever. 50% is the default on business accounts; documented low-overhead businesses can cut it to 20 to 30%.
- 12 vs 24 months. A strong recent year favors a 12-month program; steady history favors 24 with better pricing.
- Clean deposits. Transfers between your own accounts get excluded. Separate business and personal banking beats any other preparation.
- Ownership share. Own 60% of the business, count 60% of the income.
- Credit and down payment. Score tiers move both rate and required down; 10% down exists for strong files.
Bank Statement Loan Questions
What is a bank statement loan?
A bank statement loan is a mortgage for self-employed borrowers that calculates qualifying income from 12 or 24 months of bank deposits instead of tax returns. Because business owners legitimately write off expenses, their tax returns often show far less income than the business actually produces. Bank statement programs solve that: the lender averages your deposits, applies an expense factor if the statements are business accounts, and uses the result as your income. No tax returns, no W-2s, and no profit and loss reconciliation on most programs.
How do lenders calculate income from bank statements?
Lenders average the eligible deposits over 12 or 24 months, then adjust for the account type. Personal statements: deposits generally count at 100%, multiplied by your ownership percentage of the business paying you. Business statements: an expense factor is applied, commonly 50%, meaning half the deposits are treated as business expenses and half as income. Service businesses with low overhead can often document a lower expense factor, sometimes 20% to 30%, with a CPA or EA letter, which materially raises qualifying income from the same deposits.
Do I need 12 or 24 months of bank statements?
Both program types exist. A 24-month average smooths out seasonality and usually earns slightly better pricing; a 12-month average helps a business whose recent year is much stronger than the prior one. Most lenders require you to have been self-employed for at least two years, even on a 12-month statement program.
What deposits count as income on a bank statement loan?
Regular business revenue deposits count. Transfers between your own accounts, loan proceeds, tax refunds, and large one-off deposits typically get excluded, and underwriters ask about unusual items. Keeping business and personal banking separate for a clean 12 months before applying makes the file dramatically easier.
What credit score and down payment does a bank statement loan need?
Typical minimums run around a 620 to 660 credit score, with the best pricing above 700. Down payments usually start at 10% for strong files and 15% to 20% is common; a lower score or higher debt ratio pushes the requirement up. Reserves of several months of the new payment are standard.
Are bank statement loan rates higher than conventional?
Usually somewhat higher, because these are non-QM loans held to different standards than conventional mortgages. The gap varies by credit score, down payment, and program, and for many self-employed buyers the choice is not bank statement versus conventional, it is bank statement versus not qualifying at all, since tax returns after write-offs often support little or no mortgage.
Can I use a bank statement loan in Texas?
Yes. Bank statement programs are widely available in Texas for purchases and rate-term refinances of primary homes, second homes, and investment properties. Texas cash-out refinances follow the state's 50(a)(6) home equity rules on homestead property, which adds restrictions; a broker who works Texas non-QM files regularly will route that correctly.
What if my deposits vary a lot month to month?
Variation is normal and expected; the average is what counts. A declining trend across the statement period draws underwriter questions, and a strong recent 12 months can beat a 24-month average that includes a weak year. This is exactly the program-selection decision a broker makes when placing the file.