Question 1

Can I use business bank statements if my personal statements show lower deposits?

Accepted Answer

Yes, business statements typically show higher income for self-employed borrowers. Most lenders prefer business accounts since they capture gross revenue before expenses.

Question 2

What income multiplier do lenders use on my deposits?

Accepted Answer

Multipliers range from 1.0x to 1.5x depending on business type and deposit consistency. Personal statements get lower multipliers than business accounts.

Question 3

Do large one-time deposits count toward my qualifying income?

Accepted Answer

No, lenders exclude irregular deposits like tax refunds or loan proceeds. They average only recurring deposits that show consistent income patterns.

Question 4

How much higher are bank statement loan rates compared to conventional?

Accepted Answer

Expect rates 1.5-2.5% above conventional loans. Rates vary by borrower profile and market conditions, but the trade-off is qualifying without tax returns.

Question 5

Can I refinance my current mortgage with a bank statement loan?

Accepted Answer

Yes, both rate-term and cash-out refinances work. Cash-out refis require 20-25% equity and rates run slightly higher than purchase loans.

Question 6

What if I only have 10 months of bank statements?

Accepted Answer

Most programs require 12 consecutive months minimum. Some lenders allow 10 months with higher down payments, but options narrow significantly.

Bank Statement Loans in Larkspur: Income Verification That Works for Business Owners