Traditional home loans require tax returns, paychecks and W2’s to validate the borrower’s income. The bank statement mortgage offers another solution in lieu of tax returns by looking at deposits over a 3-to-12-month period.

The lender will review the bank statements by analyzing the deposits each month to calculate the debt-to-income ratio and ability to repay the home loan. Most lenders only require 3 to 12 months of your business or personal bank statements.

Many times, self-employed borrows will qualify for a larger home purchase or net loan amount since more income can be used with the bank statement loan product. This loan can use the deposits made each month to qualify vs. net taxable income which is generally a lot lower due to writeoffs.

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