Bank Statement Loans: A Mortgage Built for Self-Employed and 1099 Income
If you're self-employed, a 1099 contractor, or run your own business, you already know the frustration: your bank account shows strong, consistent income, but your tax returns — after legitimate write-offs — show a fraction of that. Traditional mortgage underwriting qualifies you off the tax return number. A bank statement loan qualifies you off the bank account number.
How bank statement loans work
Instead of two years of tax returns and W-2s, the lender reviews 12–24 months of your personal or business bank statements, averages the deposits, and applies an expense factor to arrive at a qualifying monthly income. No tax returns are required for the income calculation.
Who this is for
Business owners, freelancers and consultants, gig-economy earners, real estate agents, and 1099 contractors — anyone whose real cash flow and taxable income tell two different stories. It's also a common fit for borrowers who are early into a new business and don't yet have two full years of returns to show. Sky Capital's bank statement loan program and self-employed loan programs cover both ends of that spectrum.
Personal statements or business statements?
Most programs offer both options. Personal bank statement programs typically use a higher percentage of deposits as qualifying income; business statement programs usually apply a larger expense factor to account for business overhead. Which one fits best depends on how your income flows and what your statements look like — Sky Capital reviews both options against your actual deal.
Why it beats forcing a conventional file
Trying to "make" a self-employed file work conventionally often means over-documenting, over-explaining write-offs, or simply getting declined on paper income that doesn't reflect reality. A bank statement loan is built around how self-employed income actually works, instead of asking you to justify it.
Buying an investment property instead of a primary residence? A DSCR loan may let you qualify on the property's rental income instead of your bank statements. And if you're a W-2 physician or other licensed professional rather than self-employed, see Physician Mortgage Loans for a path built around that income type instead.
Self-employed and ready to buy or refinance?