Bank statement loans: More mortgage options for self-employed buyers and homeowners as rates ease

If you’re self-employed, paid on commission, or run a business, you already know the frustration: you can have strong cash flow, great credit, and real assets—yet a traditional mortgage can still feel like a square peg in a round hole.

That’s exactly why bank statement loans exist. They’re designed for borrowers whose real income is easier to see in deposits and cash flow than in W-2s or “perfect” tax returns. Instead of relying only on pay stubs and W-2s, these programs use recent bank statements to document income and help qualified buyers and homeowners move forward. 

And timing matters: mortgage rates have been hovering near 2025 lows. Freddie Mac’s weekly survey put the average 30-year fixed at 6.22% (Dec 11, 2025), down from 6.60% a year earlier—a meaningful shift for both purchase and refinance conversations. Freddie Mac+1

Why this matters right now

Homeownership affordability is still tight nationwide. Prices remain elevated, and everyday ownership costs (taxes, insurance, HOA) can stretch monthly budgets. When rates dip—even modestly—your buying power and refinance options can change quickly.

For self-employed borrowers, the opportunity is bigger: it’s not just “rate shopping,” it’s “qualification strategy.”

What is a bank statement loan?

A bank statement loan is a mortgage that allows you to qualify using bank statements (often 12–24 months) rather than only W-2s, pay stubs, or tax returns. It’s commonly used by self-employed borrowers, business owners, 1099 earners, and commission-based professionals. Bankrate+1

This is typically offered as part of the Non-QM (non-qualified mortgage) space—meaning the loan doesn’t fit the standard “agency/QM” box, but it can still be a responsible option when documented correctly. 

The big advantage: flexible (and realistic) income analysis

Traditional underwriting often looks at tax returns and can discount income heavily because of legitimate business write-offs. Bank statement lending is built for the real world: it evaluates cash flow.

Common approaches include:

• Reviewing deposits over a set window (often 12–24 months) SoFi+1
• Using personal statements, business statements, or both (program-dependent)
• Applying an “expense factor” (a standardized percentage) to estimate usable income
• Allowing strong compensating factors (assets, reserves, credit, equity) to strengthen the file

The result: many borrowers who look “light” on paper can still qualify prudently based on what they actually earn.

More options than ever: structure the payment to fit your life

A common misconception is that you either take a 30-year fixed or you don’t buy. In reality, today’s mortgage market offers a menu—and bank statement borrowers can often access multiple structures depending on program and profile.

Here are the options most consumers care about:

1) 30-year fixed

The classic choice: stable payment, easy to understand, long-term predictability.

2) 40-year fixed (where available)

Some portfolio and Non-QM programs may offer longer amortization terms, which can lower the monthly payment. Availability varies by lender/program, but it’s worth discussing when affordability is the main obstacle.

3) Adjustable-rate mortgages (ARMs)

ARMs can offer a lower initial rate for a period of time, which can help reduce payment early on—especially for borrowers who expect income growth, plan to refinance, or don’t plan to keep the home long-term. (Suitability depends on timeline and risk tolerance.)

4) Interest-only options (where available)

Some Non-QM and jumbo programs offer interest-only periods. This can reduce the payment early, which may help borrowers with variable income or those prioritizing cash flow. The tradeoff: you build equity slower during the interest-only period, so it must be used intentionally.

Bottom line: the “best” option is not universal. It’s the one that fits your monthly comfort zone, your time horizon, and your income pattern.

“Low-to-no origination fee” and closing cost strategies

Another place consumers win today: many lenders allow you to choose between:

• Lower rate / higher closing costs, or
• Slightly higher rate / lower closing costs (often using a lender credit)

That means some borrowers can pursue a more cash-efficient path upfront—especially helpful for:

• first-time buyers managing down payment + reserves
• self-employed borrowers keeping liquidity for business
• refinance borrowers who want to minimize out-of-pocket costs

This is where a good originator adds value: you should be shown side-by-side options with the real monthly payment and break-even point—not just a headline rate.

Bank statement loans for buying a home

A bank statement loan can be a strong solution if:

• you’re self-employed and write off a lot
• you have stable deposits but inconsistent “taxable income”
• your business is healthy, but your tax returns don’t reflect your true cash flow
• you’re shopping in a high-cost market where payments are the hurdle (not willingness to pay)

If rates move down even slightly, the monthly payment difference can be meaningful—especially in high-balance and jumbo loan sizes that are common in many metro areas nationwide.

Bank statement loans for refinancing

Refinancing may be worth exploring if you want to:

• reduce your rate and payment (when pricing improves)
• consolidate high-interest debt into one housing payment (when appropriate)
• switch from an adjustable structure to a fixed structure for stability
• restructure the term for better monthly cash flow (program dependent)

Even when rate savings aren’t huge, restructuring the loan (term, IO period, ARM vs fixed) can sometimes improve cash flow—especially for borrowers with variable income.

Who a bank statement loan is best for

This is most commonly a fit for:

• business owners
• entrepreneurs
• freelancers and consultants
• commission earners
• 1099 / gig workers
• real estate professionals

In short: borrowers with real income, but non-traditional documentation. Bankrate+1

A quick note on expectations

Bank statement and Non-QM loans can be excellent tools—but they’re not “magic.” You should still expect:

• underwriting documentation (just different documentation)
• guideline requirements that vary by lender
• pricing that depends on credit, equity/down payment, reserves, and overall risk

A strong file presentation matters. The right originator will help you package income clearly and choose the program that fits the scenario.

The takeaway

The mortgage world is evolving—slowly—but it is evolving. With rates near 2025 lows and more product flexibility available, self-employed borrowers have more paths to homeownership (or a better mortgage) than they’ve had in years. Freddie Mac+1

A bank statement loan can turn “I don’t qualify” into “here’s how we do it responsibly.” The key is smart structure, clean documentation, and choosing the right program for your goals.

Disclaimer

This article is for educational purposes only and is not a commitment to lend or a guarantee of approval. Mortgage rates, terms, and program availability change frequently and vary by borrower qualifications, property type, and lender guidelines. Always consult a licensed mortgage professional to review your specific scenario.

Darrin J. Seppinni is the president of HomeLife Mortgage.
This column does not necessarily reflect the opinion of HousingWire’s editorial department and its owners. To contact the editor responsible for this piece: [email protected].