Question 1

Can I use personal bank statements instead of business accounts?

Accepted Answer

Yes, personal statements work if they show consistent deposits from self-employment. Most lenders accept either business or personal accounts.

Question 2

How do lenders calculate income from my deposits?

Accepted Answer

They average 12-24 months of deposits then apply a 25-50% expense factor. A $15,000 monthly average typically qualifies as $7,500-$11,250 income.

Question 3

What if my income is seasonal or varies monthly?

Accepted Answer

Lenders average the full period, so seasonal patterns are fine. Wider variations may trigger requests for 24 months instead of 12.

Question 4

Do I need to explain every deposit in my statements?

Accepted Answer

Large one-time deposits require explanation. Regular business income doesn't need transaction-level documentation beyond the statements themselves.

Question 5

How much higher are rates compared to conventional loans?

Accepted Answer

Expect 0.5-1.5% higher rates depending on credit and down payment. Rates vary by borrower profile and market conditions.

Bank Statement Loans in Woodland: Income Verification for Self-Employed Borrowers