Question 1

What is a bank statement (non-QM) loan?

Accepted Answer

A bank statement loan qualifies self-employed borrowers using deposit activity from personal or business bank statements instead of tax returns, W-2s, or pay stubs. Lenders average 12 or 24 months of deposits, strip out transfers and loan proceeds, and sometimes apply an expense-ratio haircut to estimate monthly income.

Question 2

12-month vs. 24-month bank statement program: which is better?

Accepted Answer

A 24-month average smooths out a slow month or two and is the more common program. A 12-month average reacts faster to a recent jump in revenue, which helps if the business grew significantly in the last year, but it is also more exposed to one weak month.

Question 3

Why do business bank statements get an expense-ratio deduction?

Accepted Answer

A business account mixes revenue with the cost of running the business (payroll, inventory, rent), so lenders deduct a flat percentage, commonly 50%, before counting what is left as income. A CPA letter or a profit-and-loss statement can sometimes support a lower expense ratio.

Question 4

Do personal bank statements get the same deduction?

Accepted Answer

Usually not. Personal accounts are assumed to already reflect take-home income, so most programs count the deposits at or near face value once transfers and loan proceeds are removed. Some lenders still apply a smaller haircut on mixed-use personal accounts.

Question 5

What gets excluded from deposits?

Accepted Answer

Transfers between the borrower’s own accounts, loan or line-of-credit proceeds, and redeposited NSF items are excluded so the same dollar is not counted as income twice. Everything else, including irregular or large one-time deposits, generally counts unless the borrower can document it was a transfer.

Question 6

How many NSFs or returned items are too many?

Accepted Answer

There is no single industry number, but most investors want a letter of explanation once NSF activity appears, and several occurrences across the lookback period, or more than one in the same month, often trigger a decline or a request for additional statements.

Question 7

Why does ownership percentage matter?

Accepted Answer

If the account is shared with someone who is not on the loan, only the borrower’s ownership share of the deposits counts toward qualifying income. A borrower who owns 50% of a jointly held business account only gets credit for half the net deposits.

Question 8

Can I combine more than one bank account?

Accepted Answer

Yes. Most self-employed borrowers have more than one account worth counting, for example a business checking account plus a personal account, or two business accounts. Each account is averaged on its own terms (its own expense ratio and ownership share), then every account’s qualifying income is added together into one combined "book summary" number.

Question 9

What if my accounts cover different lookback periods?

Accepted Answer

It is worth flagging, but not automatically disqualifying. A 24-month business account paired with a 12-month personal account is common; just expect an underwriter to ask why the periods differ, or to request the missing months on the shorter account.

Question 10

What does a "missing statement" flag mean?

Accepted Answer

It means the months you uploaded for an account are not consecutive, for example January and March are there but February is missing. Underwriters expect an unbroken run of months, so add the missing statement or be ready to explain the gap.

Non-QM Bank Statement calculator.

What is a bank statement loan?

How the book summary is calculated

What underwriting asks for

Consecutive months, every account

Letters of explanation

CPA letter or P&L

Bank statement loan questions, answered

Run the book. Then get it priced.