ServicesBank Statement Loans
Bank Statement Loans in Smithville
If you run your own business, your tax returns often show less income than you really bring in. A bank statement loan qualifies you on the deposits in your accounts. We read those statements first and tell you what income figure a lender will likely accept.
A home loan built on deposits, not write-offs
A conventional or FHA loan uses the net income on your Schedule C or K-1. Deductions for vehicles, equipment, depreciation and a home office lower your tax bill, but they also lower the income an underwriter can count. Many contractors, ranchers, consultants and shop owners earn enough to carry a mortgage and still get turned down on paper.
A bank statement loan is a non-qualified mortgage that replaces tax returns with 12 or 24 months of bank statements. The underwriter averages your eligible deposits. For business accounts, they apply an expense factor or use a letter from your CPA to estimate what you keep. The trade-off is plain: these loans usually call for a larger down payment and carry a higher rate than an agency loan.
Before we suggest this route, we look at whether a Conventional Loan could work with your returns. If it can, that is usually the cheaper path, and we will say so.
What our review and loan work covers
Line-by-line deposit review
We go through every month of statements and separate business revenue from transfers, refunds and loan proceeds. Only true income counts, so we flag the deposits an underwriter will strip out before they do.
Personal versus business statement choice
Personal statements are often counted at full deposit value if business income flows there cleanly. Business statements need an expense factor. We run both and show you which produces the stronger qualifying income.
12-month or 24-month comparison
A growing business may look better on the most recent 12 months. A seasonal one, like hay or construction work, often averages better over 24. We compare the two.
Large deposit sourcing
Any deposit well above your normal pattern needs a paper trail, such as an invoice, a contract or a sale receipt. We list each one and tell you what document will explain it.
Written findings before any quote
You get a plain summary: the income figure we calculated, the deposits we excluded and why, and the down payment and credit range that fit. Rate quotes come after that, not before.
Signs a bank statement loan fits your situation
Your returns show a fraction of your revenue
If your gross deposits are strong but your taxable income is low after deductions, standard underwriting will undercount you.
You were denied on debt-to-income
A denial based on a high debt ratio often traces back to net income on Schedule C. Deposit-based income can change that math.
You have two or more years self-employed
Most programs want a business history you can document with a license, a CPA letter or filings. Newer businesses may still qualify, but with tighter terms.
Your income moves through one or two accounts
Clean statements make this loan work. If revenue lands in a dedicated business account and owner draws go to a personal one, the paper trail is easy to read.
You recently switched from W-2 to 1099 work
Contract income does not always fit the agency rules for history. Statements can show the steady deposits your returns have not caught up to yet.
How the loan moves from statements to closing
- 1
Phone or video intake
A loan officer asks what you do, how you are paid and which accounts you use. You can meet at our office instead if you prefer to sit down with paper copies.
- 2
Statement analysis
You send the statements and we calculate qualifying income, mark excluded deposits and note any NSF or overdraft entries an underwriter will ask about.
- 3
Findings and options
We walk you through the numbers and compare a bank statement loan against any agency option you might still qualify for. Then we quote rates on the route that makes sense.
- 4
Application and underwriting
You complete the loan application, we order the appraisal and answer underwriter conditions, usually letters of explanation for specific deposits.
- 5
Closing
Once the loan is clear to close, we review the closing disclosure with you line by line so the rate, fees and cash to close match what we discussed.
What moves your rate and costs
Bank statement loans are priced on risk, and the lender cannot see a tax return, so each factor carries more weight than on an agency loan. We show you which ones you control before you apply.
- Down payment size
- A larger down payment lowers the loan-to-value ratio, which often moves the rate more than any other single factor on this product.
- Credit score
- Pricing steps change at set score bands. Paying down a revolving balance before we pull credit can sometimes move you up a tier.
- Statement type and period
- Personal statements and a 24-month average tend to price better than business statements on 12 months, because the income picture is steadier.
- Reserves after closing
- Months of mortgage payments left in savings after closing show the lender a cushion if business slows. More reserves can improve terms.
- Property type and use
- A primary residence prices better than a second home or investment property. Acreage, common around Bastrop and Giddings, can affect appraisal and eligibility.
Bank statement loan questions
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Do I need to provide any tax returns at all?
Usually no personal or business returns are required for income. You will still sign an IRS form allowing a transcript check on some programs, and you need proof the business exists, such as a CPA letter or business license.
Will transfers between my own accounts count as income?
No. Transfers from savings, another business account or a credit line are excluded. That is why we review each month ourselves first, so you know your real qualifying figure before an underwriter calculates it.
How large a down payment should I plan for?
Expect more than a conventional loan typically requires. The exact amount depends on your credit score, the loan size and the property. We give you the figure that fits your file after reviewing your statements.
Can I refinance into a conventional loan later?
Yes, many borrowers do once two years of tax returns support the income. We check for prepayment penalties on the bank statement loan before you commit so a later refinance is not costly.
What if my statements show overdrafts?
A few isolated overdrafts are usually explainable with a short letter. A repeated pattern raises concern, and we will tell you plainly if waiting a few clean months would get you better terms.
Find out what your deposits can qualify for
Have your last 12 to 24 months of statements nearby. A loan officer will talk through how you are paid and what an underwriter is likely to count, then give you rate quotes on the option that fits.