--- title: How Bank Statement Loans Work for Self-Employed Borrowers description: Learn how bank statement loans work, how lenders may use bank statements to evaluate income, and why some self-employed borrowers choose to explore them. image: https://www.borgersonhomeloans.com/hubfs/bank%20statement%20mortgage%20options%20for%20self%20employed.jpg --- [Skip to content](https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people#main-content) [![Matt-Borgerson-Team-Harpoon-1](https://www.borgersonhomeloans.com/hs-fs/hubfs/Matt-Borgerson-Team-Harpoon-1.png?width=300&height=122&name=Matt-Borgerson-Team-Harpoon-1.png)](https://www.borgersonhomeloans.com/) - Financing Show submenu for Financing - [Conventional Home Loans](https://www.borgersonhomeloans.com/conventional-home-loans) - [Adjustable Rate Mortgages](https://www.borgersonhomeloans.com/adjustable-rate-mortgages) - [Jumbo Loans](https://www.borgersonhomeloans.com/jumbo-loan-programs) - [Refinancing](https://www.borgersonhomeloans.com/mortgage-refinancing-programs) - [Buyer Q&A Sessions](https://www.borgersonhomeloans.com/homebuyer-seminars) - [Resources](https://www.borgersonhomeloans.com/blog) - Locations Show submenu for Locations - [Virginia](https://www.borgersonhomeloans.com/locations/virginia) - [Washington, D.C.](https://www.borgersonhomeloans.com/locations/washington-dc) - [Maryland](https://www.borgersonhomeloans.com/locations/maryland) Open main navigation Close main navigation - Financing Show submenu for Financing - [Conventional Home Loans](https://www.borgersonhomeloans.com/conventional-home-loans) - [Adjustable Rate Mortgages](https://www.borgersonhomeloans.com/adjustable-rate-mortgages) - [Jumbo Loans](https://www.borgersonhomeloans.com/jumbo-loan-programs) - [Refinancing](https://www.borgersonhomeloans.com/mortgage-refinancing-programs) - [Buyer Q&A Sessions](https://www.borgersonhomeloans.com/homebuyer-seminars) - [Resources](https://www.borgersonhomeloans.com/blog) - Locations Show submenu for Locations - [Virginia](https://www.borgersonhomeloans.com/locations/virginia) - [Washington, D.C.](https://www.borgersonhomeloans.com/locations/washington-dc) - [Maryland](https://www.borgersonhomeloans.com/locations/maryland) - [Contact us](https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people#contact) [Contact us](https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people#contact) Nov 6, 2026, 9:30:00 AM # How Bank Statement Loans Work for Self-Employed Borrowers ![Picture of Matthew Borgerson, Loan Officer](https://www.borgersonhomeloans.com/hs-fs/hubfs/Matt%20Borgerson%20Headshot.jpg?width=50&name=Matt%20Borgerson%20Headshot.jpg) [Matthew Borgerson, Loan Officer](https://www.borgersonhomeloans.com/blog/author/matthew-borgerson-loan-officer) Share: [facebook-f icon](http://www.facebook.com/share.php?u=https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people) [linkedin-in icon](http://www.linkedin.com/shareArticle?mini=true&url=https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people) [Twitter icon](https://twitter.com/intent/tweet?url=https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people) [pinterest-p icon](http://pinterest.com/pin/create/link/?url=https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people) [envelope icon](mailto:?body=https://www.borgersonhomeloans.com/blog/ank-statement-loan-mortgages-for-self-employed-people) ## ![bank statement mortgage options for self employed](https://www.borgersonhomeloans.com/hs-fs/hubfs/bank%20statement%20mortgage%20options%20for%20self%20employed.jpg?width=833&height=437&name=bank%20statement%20mortgage%20options%20for%20self%20employed.jpg) If you spend any time researching mortgages as a self-employed borrower, there's a good chance you'll come across the term "bank statement loan." I get questions about these loans fairly regularly, especially from business owners, contractors, consultants, and other self-employed borrowers who aren't sure how their income will be viewed during the mortgage process. One of the biggest concerns I hear is that tax returns don't always reflect the full picture. A business may be performing well, but deductions and business expenses can make income look very different on paper. That's where bank statement loans sometimes come into the conversation. Depending on the borrower's situation and the loan program being considered, bank statements may be used as part of the income documentation process. For some self-employed borrowers, this can provide another way for lenders to evaluate income beyond tax returns alone. Let’s take a look at how bank statement loans work, who may explore them, and a few common misconceptions I hear from self-employed borrowers. ## Key Takeaways: - Bank statement loans are often explored by self-employed borrowers whose income may not be fully reflected through traditional tax return-based documentation. - Depending on the loan program, lenders may review bank statements as part of the income documentation process. - Business owners, contractors, consultants, freelancers, and other self-employed professionals may choose to explore bank statement loans. - Bank statement loans are not based solely on the amount of money in a bank account. Lenders may review a range of financial information when evaluating a borrower. - Traditional income documentation may still work well for many self-employed borrowers. - The documentation requirements and options available can vary based on the borrower, lender, and loan program being considered. ---   *Need more info on the mortgage process?* *Grab a complimentary spot in one of my weekly Buyer Q&A sessions!* *[![Sign Up](https://no-cache.hubspot.com/cta/default/46081928/interactive-182928993029.png)](https://www.borgersonhomeloans.com/hs/cta/wi/redirect?encryptedPayload=AVxigLK%2B8IYpFeiXXbVcVZ0Iw8D5zWucqD08Ne6dXmBuMOZQCkSUEBeAkric995h6toMI3mM6GLkwmxxwXtx833M%2F%2Bpmz%2Bj2EqDNf%2BRIQeloYmBu%2FdQ%2BQNhGFuC70GbMHOPCug2GoyGfSJrnovJLLA5n7qBwxG%2Biv9%2Bw9NKE0VPd5pgSIxLOTdZSvPJhPSmXcxnFhtZD%2FUz8qFJcWBWzaCciS7eopxmlfWocKm9mKUA%3D&webInteractiveContentId=182928993029&portalId=46081928)* ---   ## What Is a Bank Statement Loan? Bank statement loans are designed for borrowers whose income may be documented differently than it would be through traditional tax return-based methods. They're most commonly associated with self-employed borrowers, including business owners, contractors, consultants, entrepreneurs, and other professionals whose finances don't always fit neatly into a traditional lending model. For example, a business owner may have strong revenue and healthy cash flow but show a lower taxable income after business expenses and deductions are taken into account. In some situations, lenders may be able to review bank statements as part of the income documentation process to gain a better understanding of a borrower's financial picture. Like any mortgage, requirements can vary depending on the lender, loan program, and the borrower's individual circumstances. ## Why Some Self-Employed Borrowers Explore Bank Statement Loans For some self-employed borrowers, tax returns don't always reflect the full picture of their income. A business owner may have strong revenue and healthy cash flow but show a much lower taxable income after deductions and expenses are applied. That's not unusual, particularly when those deductions are a normal part of running a business. In situations like these, some borrowers explore bank statement loans because they may offer a different approach to documentation since their income may not be reflected in the same way as someone receiving a regular paycheck. This can include: - Business owners - Contractors - Consultants - Real estate agents - Freelancers - Other self-employed professionals That doesn't mean a bank statement loan is automatically the right fit. Some borrowers may find that traditional income documentation works well for their situation. The important thing is understanding how your income may be evaluated and which documentation options may be available based on your individual circumstances. ## How Do Bank Statement Loans Work? While every lender and loan program is different, the process generally starts with a review of your bank statements rather than relying solely on tax returns. For example, instead of focusing primarily on the income reported on a tax return, a lender may review deposits shown on personal or business bank statements as part of the income documentation process. The goal is to understand the income being generated by the business and determine whether it supports the mortgage application. Bank statements aren't the only thing lenders review. Additional documentation may also be required, and factors such as credit history, assets, and overall financial profile can still play an important role in the approval process. The exact requirements can vary, but the main difference is that bank statements may provide another way for lenders to evaluate income when tax returns don't fully reflect a borrower's financial situation. ## Bank Statement Loans vs Traditional Income Documentation While every borrower's situation is different, the biggest difference between traditional income documentation and bank statement loans is how income may be evaluated during the mortgage process. | **Traditional Income Documentation** | **Bank Statement Loans** | | --- | --- | | Income is often documented primarily through tax returns. | Bank statements may be used as part of the income documentation process. | | Commonly associated with W-2 employees and borrowers whose tax returns accurately reflect income. | Often explored by self-employed borrowers whose tax returns may not tell the full financial story. | | Tax returns are typically a key source of income verification. | Bank statements may provide additional context around income and cash flow. | | May be a good fit when income is straightforward and easily documented. | May be worth exploring when income is more complex or documented differently. | The right approach depends on the borrower, the loan program, and how your income is earned and documented. That's why it's important to look at the full financial picture rather than assuming one option is automatically better than another. ## What Should You Consider Before Exploring a Bank Statement Loan? Bank statement loans can be a useful option in certain situations, but they're not the right fit for every borrower. Before exploring a bank statement loan, it can be helpful to think about how your income is documented today: - Do your tax returns accurately reflect your earnings? - Do you receive income through a business account, personal account, or a combination of both? - How consistent are your deposits from month to month? These are some of the factors lenders may review when evaluating a mortgage application. It's also worth remembering that bank statements are only one part of the picture. Lenders may also review factors like credit history, assets, employment or business history, and overall financial strength. ## Exploring Your Mortgage Options If you're self-employed, you've probably realized by now that getting a mortgage isn't always as straightforward as uploading a couple of pay stubs. That's where bank statement loans sometimes come into the conversation. Whether they're worth exploring depends on your situation, your income, and how that income is documented. If you're not sure where you stand, reach out. I can take a look at your situation and help you understand what options may be available.   ## Frequently Asked Questions About Bank Statement Loans ### Do bank statement loans use personal or business bank statements? The documentation required can vary by lender and loan program. Depending on the situation, lenders may review personal bank statements, business bank statements, or a combination of both. ### Are bank statement loans only for self-employed borrowers? They are most commonly associated with self-employed borrowers, but eligibility requirements and available options vary by lender and loan program. ### Do bank statement loans require tax returns? Requirements vary. Some loan programs may place greater emphasis on bank statements as part of the income documentation process, while others may require additional financial documentation. ### Are bank statement loans based on how much money is in my bank account? Not necessarily. Bank statement loans are generally focused on documenting and evaluating income rather than simply looking at an account balance. ### Are bank statement loans easier to qualify for than traditional mortgages? Not necessarily. Like any mortgage, qualification requirements can vary. Lenders may consider factors such as income, assets, credit history, and overall financial profile when evaluating an application.   **Sources:** - [https://www.fha.com/fha\_article?id=3482](https://www.fha.com/fha_article?id=3482) - [https://selling-guide.fanniemae.com/sel/b3-4.2-01/verification-deposits-and-assets](https://selling-guide.fanniemae.com/sel/b3-4.2-01/verification-deposits-and-assets) [Home Ownership](https://www.borgersonhomeloans.com/blog/tag/home-ownership), [Mortgage Tips](https://www.borgersonhomeloans.com/blog/tag/mortgage-tips) facebook-f icon linkedin-in icon instagram icon **Financing** [Conventional Home Loans](https://www.borgersonhomeloans.com/conventional-home-loans) [Adjustable Rate Mortgages (ARMs)](https://www.borgersonhomeloans.com/adjustable-rate-mortgages) [Jumbo Loans](https://www.borgersonhomeloans.com/jumbo-loan-programs) [Refinancing](https://www.borgersonhomeloans.com/mortgage-refinancing-programs) **Grants and Programs:** [FHA Loans](https://www.borgersonhomeloans.com/fha-loans-mortgage-programs) [VA Loans](https://www.borgersonhomeloans.com/va-loans) [USDA/Rural Housing](https://www.borgersonhomeloans.com/usda-rural-housing-loans) [Down Payment Assistance](https://www.borgersonhomeloans.com/mortgage-downpayment-assistance-programs) **Washington DC:** [DC Open Doors](https://www.borgersonhomeloans.com/dc-open-doors-program) [First Time Homebuyer Tax Credit](https://www.borgersonhomeloans.com/dc-first-time-homebuyer-tax-credit) [Good Neighbor Next Door](https://www.borgersonhomeloans.com/good-neighbor-next-door-mortgages) **Virginia:** [Virginia First Time Homebuyer](https://www.borgersonhomeloans.com/virginia-first-time-homebuyer-savings-plan) [VHDA Loans](https://www.borgersonhomeloans.com/vhda-loans) **Maryland:** [Maryland Mortgage Program](https://www.borgersonhomeloans.com/maryland-mortgage-program) [Smartbuy 3.0](https://www.borgersonhomeloans.com/maryland-smartbuy-30) **Resources:** [Mortgage Knowledge Hub](https://www.borgersonhomeloans.com/blog) [Homebuyer Q&A Sessions](https://www.borgersonhomeloans.com/homebuyer-seminars) **Locations Served:** [DC](https://www.borgersonhomeloans.com/locations/washington-dc) [Virginia](https://www.borgersonhomeloans.com/locations/virginia) [Maryland](https://www.borgersonhomeloans.com/locations/maryland) --- [![Matt-Borgerson-Team-Harpoon-1](https://www.borgersonhomeloans.com/hs-fs/hubfs/Matt-Borgerson-Team-Harpoon-1.png?width=250&height=101&name=Matt-Borgerson-Team-Harpoon-1.png "Matt-Borgerson-Team-Harpoon-1")](https://www.borgersonhomeloans.com/) [PRIVACY POLICY](https://www.swbcmortgage.com/privacy-policy) | [Privacy Disclosure to California Residents](https://www.swbcmortgage.com/ccpa-policy) | [NMLS CONSUMER ACCESS](https://www.nmlsconsumeraccess.org/TuringTestPage.aspx?ReturnUrl=/EntityDetails.aspx/COMPANY/9741) | [DISCLOSURES](https://swbcmortgage.com/mortgage-licenses-disclosures) | [SWBC Mortgage Corporation](https://swbcmortgage.com/) 4500 East West Highway, Office 750 Bethesda, MD 20814 Matt Borgerson, NMLS # 1213242. 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