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Long Beach self-employed borrowers hit a wall with conventional loans that demand two years of tax returns. Business owners who write off expenses aggressively show income too low to qualify, even when cash flow is strong.
Bank statement loans use 12 to 24 months of deposits to prove income instead. This works for contractors, real estate agents, consultants, and small business owners across Long Beach who can't document income traditionally.
Bank Statement Loans in Long Beach
Most lenders require 12 or 24 months of consecutive business or personal bank statements. They calculate monthly income by averaging total deposits, then apply a multiplier between 1.0x and 1.5x depending on whether you use personal or business accounts.
Credit minimums run 620 to 680 depending on the lender. Down payments start at 10% but expect 15-20% for competitive rates. Debt-to-income ratios cap around 50%, slightly higher than conventional loans.
Local decision guide
Use this guide to connect bank statement loans eligibility, lender expectations, and local market factors before comparing payment options in Long Beach.
Long Beach self-employed borrowers hit a wall with conventional loans that demand two years of tax returns. Business owners who write off expenses aggressively show income too low to qualify, even when cash flow is strong.
Bank statement loans use 12 to 24 months of deposits to prove income instead. This works for contractors, real estate agents, consultants, and small business owners across Long Beach who can't document income traditionally.
Most lenders require 12 or 24 months of consecutive business or personal bank statements. They calculate monthly income by averaging total deposits, then apply a multiplier between 1.0x and 1.5x depending on whether you use personal or business accounts.
Bank statement loans live in the non-QM space, which means your local bank won't offer them. You need lenders who specialize in alternative documentation — usually accessed through brokers with wholesale lending relationships.
Rate spreads vary widely between lenders. Some price bank statement loans 0.5% above conventional, others charge 1.5% more. Program details differ too: some accept personal statements only, others require business accounts, and a few blend both.
Long Beach business owners often choose between 12-month and 24-month statement programs. The 12-month option qualifies you on higher income if your recent deposits increased, but comes with stricter credit and down payment requirements.
Watch for how lenders treat large one-time deposits. Most exclude them from income calculations, which protects you during underwriting but can reduce qualifying income. If you received a big client payment or sold equipment recently, expect the underwriter to back it out.
If you file 1099s and show reasonable income on tax returns, 1099 loans might work better than bank statements. They price closer to conventional rates and require less documentation deep-dive into your accounts.
For rental property investors in Long Beach, DSCR loans skip personal income verification entirely. They qualify you on property cash flow instead of deposits, which works when you're buying investment real estate but doesn't help with primary residence purchases.
Long Beach home prices create loan amounts that often exceed conforming limits in coastal neighborhoods. Bank statement loans work for jumbo amounts, but expect stricter requirements above $1.5 million — higher credit scores and bigger down payments.
Self-employed borrowers here include harbor-related businesses, independent healthcare providers, and creative professionals. Each income type presents different documentation challenges. Service businesses with consistent monthly deposits underwrite cleanest.
Yes, but business statements typically qualify you at higher income multipliers. Personal accounts work when business and personal finances mix, common for sole proprietors.
Most lenders require two years minimum. Some accept 12-month programs for established businesses with strong credit and larger down payments.
No. Lenders exclude transfers between your own accounts, reimbursements, and one-time windfalls. Only genuine business revenue or income deposits count toward qualification.
Expect 0.5% to 1.5% higher rates. Exact pricing depends on credit score, down payment size, and the specific lender program you choose.
Absolutely. Rate-and-term refinances and cash-out refinances both work with bank statement documentation, following the same qualification rules as purchases.