Feb 25 2026 15:49
Quick Summary:
Bank statement loans allow self‑employed West Palm Beach borrowers to qualify for a mortgage without traditional tax‑return income documentation. Instead of using adjusted gross income—which is often reduced by business write‑offs—lenders review 12 or 24 months of bank statements to estimate real cash flow. These programs are ideal for entrepreneurs, freelancers, and business owners across Palm Beach County. CTC Mortgage helps borrowers compare programs, understand documentation rules, and prepare strong applications.
What Are Bank Statement Loans?
Bank statement loans are part of the non‑QM (non‑traditional) mortgage category designed for self‑employed buyers whose taxable income doesn’t reflect their true earnings. Instead of W‑2s or tax returns, lenders analyze your business or personal bank statements to estimate qualifying income.
CTC Mortgage frequently works with West Palm Beach and Palm Beach County entrepreneurs, contractors, and small‑business owners to secure financing using this method.
Who Bank Statement Loans Help
These programs are especially useful for:
- Self‑employed professionals with substantial deductions
- 1099 earners with fluctuating income
- Business owners who reinvest earnings into their company
- Gig‑economy workers whose income varies month to month
12 vs. 24 Months of Statements: What’s the Difference?
Lenders generally offer two options:
12‑Month Bank Statement Programs
- Use the last 12 months of statements
- Offer faster qualification and higher estimated monthly income
- Ideal for stable or rising income periods
24‑Month Bank Statement Programs
- Use the last 24 months of statements
- Provide a more conservative income average
- Ideal for businesses with seasonal revenue or momentum building over time
Your CTC Mortgage loan advisor can help determine whether a 12‑ or 24‑month calculation produces stronger qualifying results for your West Palm Beach purchase.
Business vs. Personal Bank Statements
Lenders can use either business or personal statements depending on how your income flows.
Business Bank Statements
This is the most common option and typically uses a “business expense factor.” For example, a lender may apply a 50%–70% expense ratio unless CPA‑verified expenses show a different number.
Personal Bank Statements
Deposits are counted at or near 100%—but only if income can be clearly sourced from your business. Mixed deposits may require letters of explanation.
How Lenders Estimate Income
While formulas vary by lender, most follow a similar process:
- Review 12 or 24 months of statement deposits
- Remove transfers and non‑income deposits
- Average remaining business revenue
- Apply an expense factor (if using business accounts)
- Derive monthly qualifying income
Because every business operates differently, CTC Mortgage helps Palm Beach County borrowers present statements clearly to avoid unnecessary deductions or questions.
Common Pitfalls to Avoid
Bank statement loans are flexible—but lenders still scrutinize account behavior. West Palm Beach borrowers should avoid:
- Large unexplained deposits without clear documentation
- Frequent overdrafts, which can signal financial instability
- Mixed business and personal deposits that make income difficult to verify
- Unstable monthly revenue without explanations for seasonality
Preparing clean, well‑organized statements can significantly improve approval odds.
How to Prepare Your Bank Statements (Checklist)
Use this list to streamline your bank statement loan application.
✔ Gather 12–24 months of statements (PDF downloads preferred)
✔ Separate business and personal accounts if possible
✔ Avoid large cash deposits unless they can be sourced
✔ Resolve or explain any overdraft occurrences
✔ Ensure your business name and ownership structure are clear
✔ Prepare a simple overview of your business income flow
Learn More About Bank Statement Loan Options
Start Your Pre‑Qualification with CTC Mortgage
If you’re self‑employed in West Palm Beach or anywhere in Palm Beach County, CTC Mortgage can help you qualify using bank statements and guide you through every step of the process. Contact us today to begin your pre‑approval.