Question 1

How does a bank statement loan work?

Accepted Answer

Instead of tax returns and W-2s, we use 12-24 months of your personal or business bank statements. We calculate your qualifying income based on average monthly deposits (for personal) or a percentage of deposits (for business, typically 50% expense factor). This often results in significantly higher qualifying income than tax returns show.

Question 2

Can I qualify if I have only been self-employed for one year?

Accepted Answer

Some programs accept as little as 12 months of bank statements or self-employment history. Standard programs typically require 2 years. If you have been in the same industry as an employee before going self-employed, that experience may count toward the requirement.

Question 3

What if my income varies month to month?

Accepted Answer

Seasonal and variable income is common for self-employed borrowers. We average your bank deposits over the 12-24 month period to account for fluctuations. As long as the average meets the qualification threshold, monthly variation is acceptable.

Question 4

Do I need a CPA for a P&L loan?

Accepted Answer

Yes. P&L loans require a profit and loss statement prepared or signed by a licensed CPA. This provides third-party verification of your business income. The P&L should cover the most recent 12-24 months and be consistent with your bank statement deposits.

Question 5

Are the interest rates higher for self-employed borrowers?

Accepted Answer

Non-QM loan rates are typically 0.5-2% higher than conventional rates. However, the ability to qualify based on actual cash flow rather than tax returns often means you can purchase a more valuable property or secure financing that would otherwise be unavailable.

Question 6

Can I use an ITIN instead of a Social Security number?

Accepted Answer

Yes. Our ITIN loan program allows borrowers with an Individual Taxpayer Identification Number to purchase property. ITIN loans are available for primary residences and typically require 15-20% down with alternative credit documentation.

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