How Many Bank Statements Do You Need for a Mortgage?

Mortgage applications can be a paper-chase at the best of times, and income proof can be the most problematic stage. The traditional method of income proof in the form of tax returns and pay stubs isn’t available for everyone. Self-employed people, freelancers, and small business proprietors are often in this position due to the less stable nature of their income streams. 

If this is your situation, then a bank statement loan can be the ideal choice. In this guide from BrickWood Mortgage, we are looking at how bank statement loans work and, more importantly, the question of…how many bank statements for a mortgage?

How Bank Statement Loans Actually Work

A bank statement loan is a type of home loan that allows borrowers to prove their income using bank statements for a mortgage instead of traditional tax documents. Lenders review these statements to verify a consistent flow of deposits, which they use to calculate your qualifying income. It’s a practical alternative for those with non-traditional employment who have a steady income but can’t easily document it through W-2s or pay stubs. This method gives lenders a clear picture of your actual cash flow, offering a pathway to homeownership that might otherwise be closed off.

How Many Statements from Banks Are Needed?

The number of bank statements that are needed for a mortgage depends upon the lender and your individual finances. Most typically, the lender will request the last 12 to 24 months. Some lenders have programs that only demand three months’ statements; yet, this is less common.

Having 24 months of statements can result in a better loan term or rate, since it allows the lender a longer, more complete picture of your financial stability. A longer history shows stable income and prudent management of finances, which lowers the perceived risk for the lender. 

If you are considering a mortgage application with bank statements, it’s always a good idea to have at least two years sorted and available prior to the application process.

Seeking the Help of a Broker is Paramount

Navigating the bank statement loan marketplace can be confusing because needs can vary so widely from one lender to the next. That’s where seasoned mortgage brokers in Charleston, SC, can become a big asset. A broker can connect you with lenders that are experience in bank statement loans and acquainted with the unique income profiles of the self-employed. 

BrickWood Mortgage can help you determine exactly what paperwork you will be asked to provide and guide you to the right loan program for your case, all the while saving time and potential frustration.

Getting Your Documents in Order

For the self-employed and non-conventionally income-generating, a mortgage with bank statements is a crucial possibility for obtaining a mortgage. By learning how the loan functions and gathering the required paperwork – usually 12 to 24 months of bank statements – you can put yourself in position for approval. Using a qualified and seasoned mortgage broker will simplify the process and locate the correct lender for making the dream of homeownership a reality!