How the calculation works
Every bank statement program follows the same four moves: total the deposits, remove the ones that aren’t income, divide by the number of months, then apply a factor that accounts for business expenses and your share of the business.
- Personal statements — deposits are treated as income already net of business expenses, so the full eligible amount typically counts. Lenders may still question deposits that look like business revenue landing in a personal account.
- Business statements — deposits are gross revenue, so an expense factor is applied. A 50% factor is the widely used default. Reduced factors are offered by some lenders and generally require a CPA or licensed tax preparer to document your actual expense ratio.
- Averaging — the standard method divides total eligible deposits by the number of months in the period. Where a 24-month history shows declining income, many lenders use the lower of the 12- and 24-month averages instead.
- Account health — underwriters also look at overdrafts, negative balances, and months with no deposits. These can affect approval even when the average income works.
What varies by lender
Expense factors, whether reduced factors are offered at all, how declining income is handled, DTI ceilings, and whether ownership percentage is applied to personal statements are all program-specific. Treat the defaults here as the common market standard, not a universal rule.
This calculator is an educational estimate, not a loan approval, pre-qualification, or commitment to lend. It does not account for credit score, reserves, down payment, property type, loan-to-value limits, or the full underwriting review. Actual qualifying income is determined by the lender after reviewing your complete statements and documentation. Figures are illustrative and rates shown are not offers.