Bank Statement, P&L or 1099

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A bank statement mortgage is a home loan that uses a borrower’s bank statements, personal or business, to calculate their income. This is considered an alternative documentation loan type since tax returns are not used to calculate income.  1099 earners use their 1099 to calculate income.  A CPA prepared P&L can also be used to calculate income.

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These loans are for self-employed borrowers or private contractors who have tax write offs. When showing low income on tax returns it can be challenging to prove the ability to repay the mortgage. By using bank statements or 1099's or P&L's to qualify, there is a more accurate approach to calculating income.

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Requirements

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• At least 10% down payment (or 10% equity on refinance)

• 600-660 minimum credit score

• 12 months bank statements. Income will be averaged over 12 month period. 

• Sometimes a one month bank statement can be used

• Year to date profit and loss

• 40-yr interest only available

• Must be self-employed at least 2 years (rare cases allow for less than 2 years self-employed)

• Primary residence, second home, and investment property allowed

• Single family home, 2-4 unit, and condo allowed

• Available on home purchase, refinance, and cash out refinance