ServicesBank Statement Loans
Bank Statement Loans in Round Rock
If you work for yourself, your tax returns may show a lot less income than you really earn. A bank statement loan looks at your deposits instead. We help self-employed borrowers sort out statements, write-offs and down payment months before they make an offer.
What a bank statement loan is, and who it fits
A bank statement loan is a home loan that qualifies you on the money going into your accounts, not the net income on your tax returns. Most programs look at 12 or 24 months of personal or business statements, average the deposits and apply an expense factor to land on a monthly income figure.
It fits business owners, 1099 contractors, real estate agents and gig workers who write off a lot. Those deductions cut your tax bill, but they also cut the income a conventional lender is allowed to count. If your returns already show plenty of income, a conventional loan will likely cost you less, and we will tell you that.
These are non-QM loans. Rates usually run higher and down payments are usually larger than conventional. That is why we like to start early, so you know your numbers before you fall for a house in Round Rock or Georgetown.
What we handle on a bank statement loan
- Line-by-line statement review
- We go through your last 12 or 24 months of statements. We flag transfers between your own accounts, refunds and one-time deposits, since those usually do not count as income.
- Picking 12 or 24 months
- If business picked up last year, 12 months may show more income. If it dipped, 24 months can smooth that out. We run both and show you the difference.
- The expense factor
- Business statements get an expense factor taken off the deposits. Some programs use a set percentage, and some accept a letter from your CPA showing your real expense ratio. We help you see which one works in your favor.
- Large deposit letters
- Big one-off deposits need a short written explanation and sometimes a paper trail. We point them out up front so you are not chasing paperwork the week before closing.
- Down payment and reserves
- We look at where your down payment and reserves will come from, and how long that money needs to sit in your account before a lender will count it.
Signs a bank statement loan makes sense
Write-offs shrink your income on paper
Your gross sales are healthy, but after deductions your Schedule C shows a fraction of that. A lender working from tax returns only sees the small number.
A conventional lender said no
A denial over income, when you know your business pays the bills, is one of the most common reasons borrowers end up here.
About two years on your own
Most programs want roughly two years running the same business or line of work. If you are close to that mark, it is a good time to start planning.
You get paid on 1099s or commission
Agents, consultants and contractors often have no W-2 at all. Deposits tell your story better than a pay stub ever could.
Your income swings
Seasonal work can still qualify. Averaging a year or two of deposits evens out the slow months.
What moves your rate and costs
We cannot quote a rate until we see your statements, your credit and the property. Bank statement loans cost more than conventional ones because the lender is taking a non-standard view of your income. These are the things that push the numbers up or down.
Down payment size
More down usually means a better rate. Many programs ask for more down than a conventional loan would.
Credit score
Higher scores open better pricing tiers. A few points can matter, so we look at your credit before you apply.
12 or 24 months
Some programs price 12-month loans a bit higher than 24-month ones.
Reserves after closing
Several months of payments left in the bank after closing can improve your terms.
Property type and use
A primary residence prices differently from a second home or an investment property.
How it goes, start to closing
- 1
A first conversation
We talk through your business, how you get paid and what you want to buy or refinance. You can do it at our office, by phone or by video.
- 2
Statements and pre-qualification
You send your statements and we work out a qualifying income. Then we give you a pre-qualification so you know the price range to shop in.
- 3
Clean-up time
If we spot trouble, like mixed personal and business spending or overdrafts, we tell you what to change and how many months it takes to show up. This is where starting early pays off.
- 4
Application and underwriting
Once you have a contract, we take your full loan application, order the appraisal and answer underwriter questions as they come in.
- 5
Closing
We walk through the final numbers with you ahead of closing day, so the figures on the table match what you planned for.
Bank statement loan questions
Do I still need to show tax returns?
Usually not for income. Most programs qualify you on statements alone. You will still need proof the business exists, such as a CPA letter or business license, and the lender will verify it.
Should I use personal or business statements?
Either can work, depending on the program. Personal statements usually count deposits at full value, while business statements get an expense factor taken off. If business money runs through your personal account, tell us and we will work out which set makes more sense.
How far ahead should I start?
Three to six months before you want to buy is a good window. That leaves time to clear up overdrafts, separate accounts and let your down payment season. If your business is newer, starting a year out is even better.
Can I refinance later into a conventional loan?
Yes, and some borrowers plan it that way. They buy with a bank statement loan, then refinance once their tax returns show more income. We can talk through when that might pay off for you.
Can I use one for a rental or second home?
Many programs allow investment properties and second homes, though terms differ from a primary residence. If you need fast short-term money for a flip, a hard money loan may fit better, and we can compare the two.
Get your numbers before you shop
Have a few months of statements handy when we talk, and we will tell you where you stand. Then you can plan your down payment and timing without guessing.