Question 1

Do I need to be incorporated to use business bank statements?

Accepted Answer

No. Sole proprietors qualify. You just need a business account separate from your personal funds.

Question 2

Can I use bank statements from multiple accounts?

Accepted Answer

Yes, most lenders allow it. Transfers between accounts get netted out to avoid double-counting deposits.

Question 3

How do lenders calculate my income from bank statements?

Accepted Answer

They average monthly deposits over 12 or 24 months. Business statements apply an expense ratio before that average is set.

Question 4

Are bank statement loan rates higher than conventional rates?

Accepted Answer

Yes. Expect a premium over conventional rates. Rates vary by borrower profile and market conditions.

Question 5

How much cash reserves do lenders require?

Accepted Answer

Most bank statement lenders want 3 to 12 months of reserves. Jumbo loans in Santa Clara often require more.

Question 6

Can I refinance later into a conventional loan?

Accepted Answer

Yes. Many borrowers use bank statement loans to purchase, then refinance once tax returns show stronger income.

Bank Statement Loans for Santa Clara's Self-Employed