Best Bank Statement Only Mortgage Lenders

Benzinga readers love CrossCountry Mortgage and New American Funding as the best bank statement mortgage lenders.

When you think about the process of buying a home, you probably imagine months’ worth of searching for bank statements, income documentation, credit reports and endless other paperwork. This can be particularly annoying for self-employed individuals, who may not have traditional documentation that mortgage lenders need to see when proving your income.

Bank statement only mortgage loans, though not as common an option when buying a home, can provide you with an easier and more streamlined way to get a mortgage as a self-employed individual.  

The Best Bank Statement Only Mortgage Lenders

Though finding a bank statement only mortgage lender is more difficult than getting a conventional or government-backed mortgage loan, there are many lenders offering this option, including the following. 

1. Best for Low Mortgage Rates: New American Funding

New American Funding offers bank statement mortgage loans alongside additional qualification factors that you can use to get a lower interest rate without W-2 income documentation or tax returns. Some documents that you can use to qualify for a mortgage loan through New American Funding include:

• A business license
• A letter from your accountant verifying that you have been self-employed for the last 2 years
• Credit history documentation
• A signed profit and loss statement from your business
• Having between 6 months to a year’s worth of reserve cash for unexpected expenses
• Documentation of your retirement assets

Non-qualified loans from New American Funding are available with multiple terms and interest structures. 

2. Best for Non-QM Loans: Angel Oak Mortgage Solutions

Angel Oak Mortgage Solutions is a full-service mortgage lender offering traditional and portfolio mortgage loans. Angel Oak Mortgage Solutions Bank Statement program is a loan option for eligible self-employed borrowers to purchase or refinance a home. This program allows personal or business bank statements to calculate income without requiring tax returns.

3. Best for First-Time Home Buyers: CrossCountry Mortgage

CrossCountry Mortgage’s Simple Access Non-QM Bank Statement Loan provides a unique option for self-employed individuals and freelancers to access higher mortgage loans without traditional income qualification documents. There are no W-2 forms or income tax returns required to get this kind of mortgage loan. Instead, you’ll only need to submit 12 months’ worth of bank statements with regular, recurring business deposits. You’ll also need a CPA to verify your business deposits.  

The underwriting team at CrossCountry Mortgages uses the business deposits from your bank statements to determine how much money you can afford to take out in a loan by assuming that 50% of your total deposits are considered usable income. For example, imagine that you’re an independent contractor with bank statements proving that you had $120,000 in deposits last year. With a Simple Access loan, CrossCountry Mortgage would consider you to have about $5,000 worth of usable income each month, which the company uses to determine what you qualify for in a loan. Loans from CrossCountry Mortgage are available up to $3.5 million, and you can purchase everything from a single-family home to an investment property through this loan program.  

4. Best for Convenience: Rocket Mortgage

While Rocket Mortgage does not offer a specific loan that only requires you to submit bank statements in order to qualify, the lender does offer flexibility in its income verification. So long as you’ve been self-employed for at least 2 years, Rocket Mortgage can help you verify your full income and self-employment status using items like profit and loss statements and letters from your clients verifying the nature of the work you performed for them.

Rocket Mortgage can be a strong choice for you if you aren’t sure which type of loan you might need or qualify for. While you’ll need to submit more traditional income documentation in order to qualify for a government-backed loan, Rocket Mortgage’s representatives can offer personal advice and loan recommendations based on your unique business structure. From jumbo loans to VA loans, Rocket Mortgage offers a variety of loan choices and customization options ideal for individual considerations. 

How Do Bank Statement Only Mortgages Work?

Bank statement only mortgages work by allowing borrowers to use their bank statements as proof of income instead of traditional income documentation such as pay stubs or tax returns. This type of mortgage is often used by self-employed individuals or those with non-traditional income sources who may not have consistent pay stubs or W-2 forms. The borrower provides several months' worth of bank statements to the lender, who then analyzes the deposits and withdrawals to determine the borrower's income. The lender will typically average the income over a certain period of time, such as 12 or 24 months, to determine the borrower's eligibility and loan amount. It is important to note that bank statement only mortgages may have higher interest rates and stricter qualification requirements compared to traditional mortgages.

What's the Difference Between a Bank Statement Home Loan and Traditional Mortgage?

A bank statement only mortgage is a type of mortgage that is offered to self-employed individuals or those with non-traditional income sources who may not have the typical documentation required for a traditional mortgage. Instead of relying on traditional income verification documents, such as tax returns or pay stubs, this type of mortgage relies on your bank statements to prove your income.

In contrast, a traditional mortgage requires you to provide extensive documentation to prove your income, such as tax returns, pay stubs, and employment verification. This is often the preferred option if you have a stable income and can easily provide the necessary documentation.

Benefits of a Bank Statement Only Mortgage

Getting a bank statement mortgage loan can be more difficult than finding a traditional mortgage loan. However, in some circumstances, it can be worth the extra effort to look for a low doc mortgage. Some of the benefits that come with a bank statement loan include the following.

Easy to Collect Documents

As the name implies, a bank statement only mortgage loan allows your lender to use your bank statements as its primary documentation to determine whether you qualify or not. Unlike traditional mortgage loans (which may require tax documents, pay stubs and more) you can find the documents for a bank statement mortgage loan relatively easily.

Based on Current Income

As a business owner, you likely try to do everything that you can to reduce your taxable income throughout the year in order to limit costs and ensure that you have enough funds in reserve to cover any emergencies that present themselves. Unfortunately, mortgage lenders usually use tax statements to qualify income from self-employed individuals, which means that the taxable income on your documentation may not accurately reflect the amount of money that you’re earning and that you can afford to spend on a home.

When your mortgage lender accepts bank statements in lieu of tax documents, you can get rates tailored to your current income and funds. This can help self-employed individuals continue to save money for tax-deductible expenses (like contributions to a retirement account, payroll and more) while also being afforded the opportunity to borrow more in a mortgage loan. This can also be beneficial if your income changes drastically from year-to-year, which is a situation that many business owners find themselves in.  

Underwriting Takes Less Time

If you need to be out of your current space quickly, you may want to consider looking for a bank statement only mortgage loan. Because these loans require less documentation, the underwriting process can be completed faster on the end of the mortgage company.

Helps the Self-Employed Document Income

If you’re self-employed or you own your own business, documenting your income for your bank statement mortgage loan can be a time-consuming and difficult process. You may not have traditional W-2 filings or pay stubs to prove your income, which most lenders require for the mortgage process. If you’re an independent contractor, providing your income may require digging up dozens of 1099 forms, which can put a major toll on your business. A bank statement only mortgage loan helps you apply for a loan faster, eliminating the need to search for endless documentation. 

How to Apply for a Bank Statement Mortgage

To apply for a bank statement-only mortgage, you would typically follow these steps:

1. Gather Your Financial Documents

Collect your bank statements for the past 12-24 months. The number of months required may vary depending on the lender. You may also need to provide other supporting documents such as tax returns, profit and loss statements, or accountant letters.

2. Find a Lender

Look for lenders that offer bank statement-only mortgages. Not all lenders provide this type of loan, so it's important to do your research and find one that suits your needs.

3. Pre-Qualification

Contact the lender and go through the pre-qualification process. Provide them with the necessary financial information, such as your bank statements, and they will assess your eligibility for the loan.

4. Application

Once you have been pre-qualified, complete the loan application provided by the lender. You will need to provide details about your income, employment history, and any other relevant financial information they may require.

5. Verification

The lender will review and verify your financial documents, including your bank statements. They will assess your income, expenses, and overall financial stability to determine your ability to repay the loan.

6. Underwriting

The lender will evaluate your application and supporting documents to make a decision on your loan request. They may request additional information or clarification if needed.

7. Approval and Closing

If your application is approved, you will receive a loan commitment letter outlining the terms and conditions of the mortgage. You will then proceed to closing, where you will sign the necessary paperwork and finalize the loan.

Finding the Best Bank Statement Only Mortgage Lender

Finding the best bank statement only mortgage lenders is crucial if you do not have traditional documentation to support your income. These lenders understand your unique financial circumstances and are willing to provide mortgage options tailored to your needs. By considering factors such as interest rates, loan terms, customer service, and reputation, you can make informed decisions when selecting the best bank statement only mortgage lenders for your home financing needs. With the right lender, you can achieve your homeownership dreams and secure a mortgage loan that aligns with your financial goals.

Frequently Asked Questions