What Exactly Are Bank Statement Loans?

Let’s break it down in plain terms. A Bank Statement Loan is a type of mortgage product that allows lenders to determine your income and ability to repay the loan by analyzing your bank statements rather than traditional pay stubs or tax returns. This makes Bank Statement Loans one of the most popular mortgage options for non-traditional earners.

Here’s how the process generally works: Instead of submitting employer-issued W-2 forms or detailed tax returns — which can be complicated for self-employed individuals — you simply provide 12 to 24 months of your most recent bank statements. The lender then reviews those statements to calculate your average monthly income based on your deposits. Once your income is verified through this method, the lender evaluates the rest of your application just like any other mortgage — looking at your credit score, assets, debts, and the property itself.

Bank Statement Loans are not a new concept in the mortgage industry, but they have grown significantly in popularity over the past several years as more Americans have moved toward self-employment, contract work, and entrepreneurship. The modern workforce looks very different from what it did a generation ago, and Bank Statement Loans were created to reflect that reality.

Who Qualifies for a Bank Statement Loan?

One of the greatest advantages of Bank Statement Loans is how broadly they can apply. While every lender has its own set of qualification criteria, Bank Statement Loans are typically a strong fit for the following types of borrowers:

Self-Employed Individuals – If you own your own business or operate as a sole proprietor, your tax returns may show lower income due to business deductions. Bank Statement Loans (conventional loans)allow you to demonstrate your true earning potential through your actual deposit history.

Freelancers and Contractors – Writers, designers, developers, consultants, and other freelance professionals often receive income from multiple sources on irregular schedules. Bank Statement Loans accommodate this kind of variable income with ease.

Business Owners – Whether you run a small local shop or a growing enterprise, Bank Statement Loans give business owners a way to qualify for a mortgage without the complexity that traditional income documentation often brings.

Commission-Based Earners – Real estate agents, salespeople, and other professionals who earn a significant portion of their income through commissions can use Bank Statement Loans to show their full earning picture.

Seasonal Workers – Those whose income fluctuates throughout the year due to the nature of their work can benefit greatly from the 12-to-24-month window that Bank Statement Loans use to calculate average income.

To qualify for a Bank Statement Loan, most lenders will look for a minimum credit score — often around 620 or higher, though this can vary. You will also typically need a down payment ranging from 10% to 20%, and your debt-to-income ratio will be evaluated to ensure you can comfortably manage the monthly payments.

Why Choose Bank Statement Loans Over Traditional Mortgages?

Traditional mortgage products work wonderfully for borrowers with steady, salaried employment and clean W-2 documentation. But for many Americans today, that simply isn’t the reality. Bank Statement Loans were built to bridge that gap, and they come with several key advantages worth considering.

Simplified Income Verification – Forget the headache of gathering years of tax returns, business profit-and-loss statements, and employer letters. With a Bank Statement Loan, your bank statements do the talking. This dramatically reduces paperwork and speeds up the process.

Greater Flexibility for Non-Traditional Earners – Whether your income comes from multiple clients, seasonal projects, or a combination of sources, Bank Statement Loans are flexible enough to accommodate a wide range of income structures.

Competitive Loan Amounts – Contrary to what some borrowers may assume, Bank Statement Loans can offer competitive loan amounts. Depending on your financial profile, you may be able to qualify for a loan amount that comfortably covers the property you have your eye on.

Refinancing Options – Bank Statement Loans aren’t just for purchases. If you currently have a mortgage with a higher interest rate, a Bank Statement Loan could be used to refinance and potentially lower your monthly payments.

Speed and Convenience – Because the documentation requirements are more streamlined, the overall mortgage process with a Bank Statement Loan can often move faster than a traditional loan application.

At Garden City Mortgage Team, we believe every qualified borrower deserves access to homeownership — and Bank Statement Loans are one of the most powerful tools we use to make that happen.

How the Bank Statement Loan Process Works at Garden City Mortgage Team

We know that applying for any kind of mortgage can feel intimidating. That’s why we’ve made our Bank Statement Loan process as clear and straightforward as possible. Here’s what you can expect when you work with our team:

Step 1: Initial Consultation – The process begins with a simple conversation. You’ll speak with one of our experienced loan officers who will listen to your situation, answer any questions you have, and help determine whether a Bank Statement Loan is the right fit for your needs.

Step 2: Gather Your Documentation – We’ll let you know exactly what documents you need to submit. For a Bank Statement Loan, this typically includes 12 to 24 months of bank statements, along with some standard items like identification, proof of assets, and information about your debts.

Step 3: Income Analysis – Our team will carefully review your bank statements to calculate your average monthly income. We look at the full picture to give your application the strongest possible foundation.

Step 4: Underwriting and Approval – Once your application is complete, it moves into underwriting. Our goal is to process your Bank Statement Loan application efficiently and transparently, keeping you informed at every stage.

Step 5: Closing – Once everything is approved, we’ll work with you to finalize all the details and get you to the closing table. Congratulations — you’re a homeowner.

Throughout this entire journey, you’ll have direct access to your loan officer at Garden City Mortgage Team. We pride ourselves on communication, clarity, and putting the borrower first.

The Benefits of Working with Garden City Mortgage Team for Your Bank Statement Loan

Choosing the right lender for your Bank Statement Loan matters just as much as choosing the right loan product. At Garden City Mortgage Team, we bring experience, dedication, and a genuinely client-first approach to every single transaction.

We specialize in Bank Statement Loans (jumbo loans)and understand the unique needs of self-employed borrowers, freelancers, and business owners. We won’t ask you to jump through unnecessary hoops or make you feel like your financial situation is a problem. It isn’t — it’s simply different, and we are equipped to work with it.

Our team stays up to date on the latest lending guidelines and products so that we can always offer you the most current and competitive Bank Statement Loan (USDA Loans, VA Loans) options available. We work with a wide network of lenders and investors, which gives us the ability to shop around on your behalf and find the terms that make the most sense for your situation.

Most importantly, we treat every borrower as an individual — not just a number on a file. From your very first phone call to the day you close on your new home, Garden City Mortgage Team is in your corner.