Question 1

How do lenders calculate income from bank statements?

Accepted Answer

Lenders average your monthly deposits over 12 or 24 months. They then apply an expense ratio of 25% to 50% to estimate net qualifying income.

Question 2

Can I use personal bank statements instead of business accounts?

Accepted Answer

Yes, many programs accept personal statements for self-employed borrowers. Business account statements often produce higher qualifying income since expense ratios may be lower.

Question 3

What credit score do I need for a bank statement loan?

Accepted Answer

Most lenders require 620 minimum, but rates improve at 680 or higher. Scores above 700 often unlock better pricing and lower down payment requirements.

Question 4

How much do bank statement loan rates cost versus conventional?

Accepted Answer

Expect rates 0.5% to 2% higher than conventional loans. Exact pricing depends on credit score, down payment, and loan amount. Rates vary by borrower profile and market conditions.

Question 5

Do I need 12 or 24 months of bank statements?

Accepted Answer

It depends on the lender and your scenario. Some programs accept 12 months with higher down payments or credit scores. We shop lenders to find the best fit.

Question 6

Can bank statement loans work for East Palo Alto investment properties?

Accepted Answer

Yes, but DSCR loans often work better for rentals since they qualify based on property cash flow. We compare both options to maximize your loan amount.

Bank Statement Loans for East Palo Alto Self-Employed Borrowers