Key Takeaways
- A personal bank statement mortgage generally uses 12 or 24 months of personal account statements to document income instead of relying on tax returns for that calculation.
- Some programs count 100% of eligible personal deposits. A business statement calculation may subtract an allowance for business expenses, so the two methods can produce different income figures.
- A transfer from your business account may count if the lender can verify that it represents earnings paid to you. Moving money between accounts does not create additional income.
- Use the statement method that helps you qualify for the loan amount you need. If both personal and business statements work, compare the rates, fees, and documents each lender requires.
If you’re self-employed, a lender may use deposits into your personal bank account to calculate the income you can use to qualify for a mortgage. This is called a personal bank statement mortgage. “Personal” refers to the bank account the lender reviews, not the type of loan. You’re still applying for a mortgage to buy or refinance a home.
The lender won’t count every deposit as income. It looks at which deposits represent earnings and may ask where the money came from. If you have both personal and business accounts, ask how much income the lender would count from each, if its program accepts both. One set of statements may help you qualify for the mortgage amount you need even if the other doesn’t.
What is a personal bank statement mortgage?
A personal bank statement mortgage lets you use deposits into your personal bank account to document self-employment income. This can help if you earn a steady income but your tax returns show less after business deductions. The lender reviews your statements, decides which deposits count as earnings, and uses them to calculate the monthly income you can qualify with.
In “personal bank statement mortgage,” personal describes the bank account the lender reviews. It doesn’t mean you’re applying for a personal loan. Some personal loan lenders also review bank statements to verify income, but those are different loans.
This option may fit if you freelance, work as an independent contractor, or own a business and pay yourself through a personal account. You may be able to use it to buy or refinance a home. The lender will also review your credit, debts, funds for the purchase or refinance, and the property.
How do lenders calculate income from personal bank statements?
Lenders start by identifying the deposits they can count as income, then average those deposits over the months reviewed:
Eligible deposits ÷ months reviewed = average monthly qualifying income
Say a lender accepts $144,000 in deposits across 12 months. That works out to $12,000 a month in qualifying income. The key is what the lender accepts: a $5,000 payment from a client may count as earnings, while a $5,000 transfer from your savings does not create new income.
The account you use can affect the calculation, too. Some lenders may count 100% of eligible personal deposits. With business statements, a lender may subtract an allowance for operating expenses before calculating your income. The allowance depends on the program and may also depend on your business’s documented costs.
What if you have both personal and business accounts?
Ask the lender to calculate your income using each account. The qualifying income may differ, even though both accounts reflect the same business.
Suppose your business receives $30,000 a month in eligible deposits. If the lender applies a 50% allowance for business expenses, it would count $15,000 a month as qualifying income. Now compare that with the amounts you pay yourself into your personal account:
| Average amount paid into the owner’s personal account | Illustrative personal statement income | Illustrative business statement income |
|---|---|---|
| $16,000 a month | $16,000 a month | $15,000 a month |
| $9,000 a month | $9,000 a month | $15,000 a month |
In this example, personal statements show more income for the owner who takes $16,000 a month. Business statements show more for the owner who leaves more money in the company. The 50% expense factor is an illustration, not a rule for every lender or business.
Even when one method produces a higher average, a lender may ask for more documentation or apply different loan terms. Compare the offers before deciding which route is better for you.
Which deposits count as income for personal bank statements?
The lender wants to identify money you regularly earn from your work or business. Client payments deposited directly into a personal account may be straightforward to trace. If you transfer earnings from a business account, the lender may ask for business records or statements to confirm where that money came from.
Deposits such as these usually need a closer look:
- Transfers from savings or another personal account: You already owned this money, so the transfer is not new income.
- Loan proceeds, gifts, and refunds: Money arriving in your account does not necessarily represent earnings you can rely on to pay a mortgage.
- Large or unusual deposits: The lender may ask for invoices, contracts, or other records showing their source. A seasonal payment from a client is different from a one-time sale of personal property.
- A spouse’s wages or rental receipts: The lender may be able to use other income, but it may need to document and calculate it separately rather than treat every deposit as self-employment income.
If you use one personal account for both client payments and business spending, ask how that lender classifies the account. The name on the account alone may not tell you how it will calculate your income. Likewise, do not assume you can add the same business earnings once on the business statements and again after transferring them into your personal account.
When might personal statements work better than business statements?
Personal statements are worth exploring if you regularly pay yourself from your business and those payments are easy to identify. They may also be an option if clients pay you directly into a personal account. In either case, the lender needs to decide which deposits represent income and whether it needs records from your business.
Business statements may show more qualifying income if you leave much of what you earn in the business. They can also become more competitive if the lender accepts evidence that your actual operating expenses are lower than its standard allowance. For example, Griffin Funding says its typical 50% business expense factor may be reduced as low as 10% in some cases, depending on the business type and number of employees. This means that nearly 90% of your eligible business deposits could count, producing a higher monthly qualifying income figure to work with. Not every lender offers such a low expense factor for business statements, so ask what yours would use and what proof or documents it needs.
Ask the lender: “How much income would you count from each set of statements, and what would you leave out?” For more on how lenders use business deposits, see our guide to business bank statement loans.
How many months of bank statements do you need for a personal bank statement mortgage?
Lenders commonly review 12 or 24 months of personal bank statements. The period available to you depends on the lender and its loan program.
The number of months can change the income the lender calculates. If your earnings have grown recently, a 12-month average may be higher. If your work is seasonal, 24 months may give the lender a fuller picture across two years. Ask whether the lender accepts both periods, what your qualifying income would be under each, and whether the choice affects your rate or other loan terms.
Want to see what those income figures could mean for your mortgage? Try our bank statement loan calculator. When you’re ready to gather your documents, use our bank statement loan document checklist to help you prepare.
What else do you need to qualify?
Bank statements change how a lender documents income. They do not replace the rest of the mortgage application. Depending on the program, expect a review of:
- Your business or work history: You may need a business license, a letter from a tax professional, or other proof that your work is ongoing.
- Your credit and existing debts: The lender compares the proposed housing payment and other debt payments with the income it can document.
- Your funds: For a purchase, you need to show the down payment and closing costs. Some programs also require money left over after closing, called reserves.
- The property: An appraisal and the program’s rules for the property type affect the final loan amount.
For example, CrossCountry Mortgage lists personal or business statements, credit, debts, liquid assets, and potentially two or more years of self-employment history among its bank statement mortgage considerations. Requirements differ among lenders. Our bank statement loan requirements guide explains these pieces in more detail.
Also ask whether a conventional mortgage is available to you. Conventional lenders can analyze self-employment income from tax returns; deductions do not automatically mean you cannot qualify. If both options are available, compare their complete offers rather than assuming the bank statement loan is the better deal.
How should you compare lenders and offers?
First, confirm that a lender accepts personal statements for the property and loan you want. Then ask it to review your actual deposit pattern. Published programs show why these questions matter:
| Lender example | What its published materials say | What to ask about your file |
|---|---|---|
| Griffin Funding | Accepts personal or business statements and says it counts 100% of eligible personal deposits. It also describes different expense factor options for business accounts. | Which of my deposits qualify under each method, and what would each calculation show? |
| CrossCountry Mortgage | Advertises a 12- or 24-month bank statement mortgage using personal or business statements. Its consumer page does not give one universal percentage for personal deposits. | How will you calculate income from my specific account and document my business history? |
| Total Quality Lending | Describes a personal statement program that also requests two months of business statements to verify business activity and transfers. | Will you need records from my business even if you use my personal account to calculate income? |
These are examples of published programs, not loan offers. Availability and terms depend on the lender, the property, your finances, and the program in effect when you apply.
Once lenders have reviewed your file, compare the same loan amount and repayment type. Look at the interest rate, monthly payment including estimated taxes and insurance, cash needed at closing, lender fees, and whether the rate can change. If the loan is for a personal residence, compare the lenders’ Loan Estimates. A larger qualifying income figure matters only if it leads to a loan you can afford on acceptable terms.
How can you prepare your personal statements?
- Gather the full statements. Get every page for the consecutive months the lender requests, including months with fewer deposits.
- Trace the important deposits. Keep invoices, contracts, payment records, or business statements that help show which deposits came from ongoing work.
- Explain transfers and unusual items. Note which deposits came from another account you own, a loan, a refund, or a one-time event.
- Ask for both income calculations. If you have a business account, send the lender enough information to assess whether the personal or business method fits your situation.
You do not need identical deposits each month to start the conversation. What matters is whether the lender can identify income it expects to continue.
Next step:
- Gather your recent personal statements and, if you have one, your business account statements. Use our document checklist to track what you have.
- Ask a lender to show you which deposits it would count and what your average monthly qualifying income would be using each account.
- Then compare the actual mortgage offers, including the monthly payment and cash needed at closing. Our bank statement income calculator can help you estimate the monthly payment your qualifying income may support before you request a quote.
Calculate your qualifying income
Frequently Asked Questions
Is a personal bank statement loan a personal loan?
No. A personal bank statement loan is a mortgage, not a personal loan. You can use it to buy or refinance a home. “Personal” describes the bank account the mortgage lender reviews to calculate your income; the home backs the loan.
Do lenders count every deposit on a personal bank statement?
No. They review the source of deposits and generally exclude money that does not represent qualifying income, such as a transfer from your savings or loan proceeds. Ask the lender for its calculation so you can see what it counted.
Can I use personal statements if I do not have a separate business account?
Possibly. Some self-employed borrowers receive client payments directly into a personal account. Tell the lender how you use that account and ask whether it will apply an expense factor or request other business records.
Can I combine my bank statement income with my spouse’s wages?
It may be possible if your spouse applies as a co-borrower. The lender may document your spouse’s W-2 wages under its standard income-verification rules and evaluate them alongside your bank-statement income when determining whether you qualify. Program rules and documentation requirements vary by lender. Griffin Funding says eligible files may combine a co-borrower’s W-2 and tax-return income with the other borrower’s bank-statement income.
Will I need tax returns for a personal bank statement mortgage?
Personal bank statement programs generally use bank statements instead of tax returns to calculate self-employment income. You may still need to provide proof of your business and funds for closing, so ask the lender what documents your program requires before you apply.