A bank statement loan is a mortgage that qualifies a self-employed borrower on 12 or 24 months of bank deposits instead of tax returns. It is built for New Jersey business owners, 1099 contractors and freelancers whose write-offs make their returns look smaller than their real income.
Why tax returns fail self-employed buyers
Good accountants deduct everything they legally can. That helps at tax time and hurts at mortgage time, because conventional underwriting counts your net income after deductions. A borrower who grosses $250,000 but shows $80,000 on a Schedule C is underwritten as an $80,000 borrower.
How a bank statement loan works
The underwriter reviews 12 or 24 months of personal or business bank statements, totals the deposits, and applies an expense factor to estimate usable income. The expense factor depends on the business and the lender, and in some programs a letter from your CPA can support a different factor.
- Documentation: bank statements, proof the business exists (license or CPA letter), and a standard loan application.
- Down payment and credit: requirements vary by lender and property type. These programs usually ask for more down payment and are priced higher than conventional loans.
- Why a broker matters: every lender sets its own guidelines for these loans. We compare programs across our wholesale lenders to find one that fits your file.
Who bank statement loans are built for
- Restaurant, salon and contracting business owners
- 1099 contractors who write off mileage, equipment and a home office
- Real estate investors and short-term rental hosts
- Freelancers whose income is real but uneven
Illustration: how the math can change the picture
This is a hypothetical example, not a quote or a promise of approval. Suppose a business owner shows $62,000 net on a tax return but deposits average $19,000 a month. After the lender applies an expense factor, the qualifying income can be far higher than the return suggests. The exact result depends on the program, the lender and the file.
Pitfalls to avoid before you apply
- Keep business and personal funds separate once you decide to apply.
- Avoid large or unexplained cash deposits. Underwriters may exclude or question them.
- Avoid taking on new debt before you apply.
Frequently asked questions
Can I get a mortgage in New Jersey without tax returns?
Yes. Bank statement and other alternative-documentation programs qualify you on deposits or assets instead of tax returns. Availability and terms vary by lender.
Is a bank statement loan the same as a conventional loan?
No. It is a non-QM product with its own guidelines, and it is usually priced higher than conventional financing. For many self-employed buyers it is the difference between qualifying and not.
Who can I talk to?
Call JahnLends at (732) 754-7474 or meet the team. You can also watch our short video, Bank statement loans for self-employed buyers, and the explainer on how the expense factor works.
Talk to a loan officer about a bank statement loan →
JahnLends is the Woodbridge, NJ branch of AMS Mortgage Services, NMLS# 145742. Equal Housing Opportunity. For information purposes only. This is not a commitment to lend or extend credit. All loans are subject to credit approval. Other restrictions may apply.