A lender reviews your personal or business bank statements for the past 1-2 years. The lender will use these statements to calculate your income for qualification purposes. Bank statement loans work well for self-employed workers who use tax strategies to reduce their taxable income. Conventional lenders will look at the reduced taxable income and possibly reject your application or assign a higher interest rate. Bank statements help prevent that scenario from happening to gig workers and business owners. You can also use liquid assets, such as stocks, mutual funds, and 401k plans to get a bank statement loan.

You may have to make a larger down payment to get this financing, but a bank statement loan can help you get more capital for your mortgage. You could still end up with a respectable 10% down payment. It’s not as low as the 3% minimum down payment for conventional mortgages, but a 10% down payment is more reasonable than the 20%-30% down payment requirement for other loans. A good credit score will help you get better financing, and the minimum requirement depends on the lender.