Bank Statement Loan FAQs

At North American Savings Bank (NASB), a bank-statement loan is a mortgage that verifies income using bank statements instead of tax returns or W‑2s. Usually, a bank-statement mortgage allows self‑employed borrowers to qualify based on cash flow from deposits rather than taxable net income.

This option helps entrepreneurs and freelancers who claim legitimate write-offs while still demonstrating their ability to repay.

NASB’s Bank Statement Loan is designed for self-employed borrowers whose reported taxable income does not reflect their actual earnings due to business deductions. These loans are typically ideal for small business owners, independent contractors, gig workers, and 1099 earners with consistent deposits.

If your deposits are steady but your adjusted gross income is low, this program might be a better fit than traditional underwriting.

This emphasizes actual revenue trends instead of tax return net income.

NASB evaluates your deposits, credit, LTV, DTI, reserves, and property details, relying on bank statements instead of tax returns to verify income. Typically, bank statement mortgages follow standard credit and collateral guidelines while accepting alternative income documentation.

This offers a familiar underwriting experience with flexible income verification.

NASB’s program allows eligible borrowers to qualify without W-2s or tax returns and offers in-house underwriting with no prepayment penalties. Typically, bank statement mortgages offer flexibility for self-employed borrowers by focusing on cash flow and reducing documentation requirements.

Competitive, customized terms and practical support simplify the entire process from application to closing.

NASB may request a business license or a CPA letter to verify business activity when using business bank statements. Usually, lenders require proof of self-employment and ongoing operations.

This helps determine program eligibility and accelerates underwriting.

NASB allows either personal or business statements, but not both, to ensure the income analysis matches the selected account type. Usually, programs require only one type of statement to prevent double‑counting or inconsistent expense calculations.

If you manage multiple accounts, we will help identify the one that best reflects recurring revenue.

NASB accepts merchant processor deposits when statements clearly show gross revenue and transfer patterns that support the income analysis. Generally, lenders may count processor deposits if audit trails connect sales to bank deposits and reflect business activity.

Provide clear reports and account statements indicating the flows between the processor and your bank.

NASB generally requires a government-issued ID, a credit report, documentation of assets or reserves, and proof of business activity such as a business license or CPA letter. Typically, lenders request identity, credit, asset, and business verification to assess stability and repayment capacity.

Your checklist will be tailored to your scenario to keep underwriting efficient.

NASB does not require tax returns for bank-statement loan qualification because the statements serve as the primary documentation of income. Typically, alternative documentation mortgages verify income through statements instead of traditional returns or W‑2s.

You will still need to provide standard ID, credit, asset, and business documentation as applicable.

NASB accepts either personal or business bank statements, provided deposits can be traced to legitimate business activity, and it consistently uses a single account type. Typically, programs only allow either personal or business statements (not both) to ensure precise income analysis.

Your loan officer will help you select the statement type that best reflects your revenue.

NASB’s Bank Statement Loan has no prepayment penalties, allowing you to pay down or refinance when it makes sense. Generally, many residential mortgages do not include prepayment penalties, although some Non‑QM products might—always verify program terms.

NASB’s policy allows flexibility throughout your loan term.

NASB usually sets the debt-to-income ratio limit at 50% for bank-statement loans, depending on the overall strength of the file. Generally, DTI limits for alternative documentation mortgages align with conventional ranges but are adjusted based on risk.

Compensating factors (credit/reserves) can help within guideline limits.

NASB generally requires a minimum loan amount of $175,000, with exceptions for properties in the Greater Kansas City metro and surrounding areas. Across programs, minimums help ensure efficient underwriting and adherence to portfolio guidelines.

Your loan officer can confirm eligibility for local exceptions.

NASB’s Bank Statement Loan provides loans up to $1,250,000, depending on eligibility and underwriting. Usually, non-QM programs set maximums based on risk appetite, property type, and market conditions.

Jumbo scenarios can be assessed individually through in-house underwriting.

NASB requires reserves based on credit, occupancy type, and loan amount; your loan officer will clarify the specific requirements. Generally, reserves serve as a buffer that supports repayment under alternative documentation programs.

Expect reserve levels to fluctuate based on loan risk and property use.

NASB’s rates for bank statement loans are usually higher than conventional mortgages but remain competitive among non-QM options. Generally, alternative documentation loans are priced based on risk and complexity, so their rates tend to be higher than those of standard conforming mortgages.

Pricing considers credit, deposits, loan amount, property, and reserves.

NASB offers bank statement loans with down payments as low as 10% when mortgage insurance is required, up to a maximum LTV of 90%. Generally, bank statement mortgages usually need a 10–20% down payment, depending on creditworthiness, loan amount, and risk factors.

Your specific requirement depends on file size and program settings.

NASB usually requires a minimum credit score of 700 for its Bank Statement Loan program. Across the market, alternative documentation mortgages often need higher credit scores than some traditional programs.

Higher scores can help secure better pricing and terms.

NASB’s availability varies by property type and location, and it isn't offered everywhere or for all property types. Program eligibility usually depends on occupancy, property class, and geographic restrictions.

Your loan officer will verify current availability for your property.

NASB’s timeline is similar to that of standard mortgages—typically 30 days or less—depending on file complexity and document-processing speed. Normally, reviewing statements can add time, but organized documentation helps keep closings on track.

Responsive communication speeds up underwriting and closing.

NASB provides cash-out refinances when credit, equity, and program guidelines support the application. Typically, cash-out involves enough equity and adherence to maximum LTVs and documentation standards.

We’ll match proceeds with qualifying income and risk limits.

NASB offers both rate-and-term and cash-out refinance options for qualified borrowers using bank statements. Broadly, cash-out availability depends on equity, LTV limits, credit, and program rules.

Your loan officer can analyze the impact of proceeds and payments.

NASB offers bank statement loans for both home purchases and refinances, subject to eligibility and guidelines. In general, alternative documentation mortgages can be used for purchase or refinance when income can be verified through statements.

We’ll help you compare scenarios based on your goals and equity considerations.

NASB accepts processor deposits when they are well-documented and traceable to business activities and bank transfers. More generally, lenders will consider these sources if statements and reports provide clear audit trails.

Consistent mapping between processor reports and bank deposits is essential.

NASB may use a CPA-verified expense ratio when records support lower operating costs than standard assumptions. Generally, verified expense attestations can enhance qualifying income by accurately reflecting actual overhead costs.

Request your CPA to document the methodology and coverage period.

NASB reviews 12–24 months of statements to assess overall revenue patterns, including seasonality. Typically, lenders prefer consistent annual cash flow even if monthly deposits fluctuate.

Providing 24 months can help smooth out seasonal fluctuations.

NASB applies a standard expense factor to business deposits and may allow a CPA-verified ratio if documentation supports it. Generally, lenders normalize gross deposits by deducting typical operating expenses to estimate sustainable income.

CPA letters can justify lower expense assumptions for lean operations.

NASB’s Bank Statement Loan stands out by offering flexible 12- and 24-month options, high loan limits, and manual underwriting focused on real cash flow. Our personalized approach helps self-employed borrowers qualify when traditional lenders say no.

NASB underwrites, processes, and closes bank statement loans in-house rather than brokering them. Generally, in-house teams can speed up reviews and maintain consistent guidelines and communication.

This helps ensure a smooth process from application to closing.

NASB generally requires two years of self‑employment or 1099 contract work, with a possible one-year exception in the same field. Typically, lenders seek documented continuity of income and industry experience to verify repayment ability.

Provide statements and CPA/1099 documentation for the qualifying period.

NASB requires escrow for property taxes and insurance with bank statement loans. Generally, escrow accounts include taxes and insurance in addition to the monthly mortgage payment. Payment to ensure obligations are met.

This simplifies budgeting and payment management.

NASB’s Bank Statement Loan is not available in New York State, nor in the Chicago and Baltimore metro areas. It is also not offered in all locations or for all property types. Program availability varies by state, metro area, and property class due to licensing and portfolio restrictions.

Confirm current eligibility for your ZIP code with a loan officer.

The NASB Bank Statement Loan typically requires 12 consecutive months of statements, a 10% down payment with MI (maximum 90% LTV), a minimum credit score of 700, and up to 50% DTI. The minimum loan amount is $175,000, and the maximum is $1.25 million, with escrow for taxes and insurance. Generally, Non-QM programs set minimums for credit, down payment, DTI, and loan size to balance flexibility with risk management.

A two‑year self‑employment history is typical, with a one‑year exception in the same line of work possible.