Bank Statement Loan California [2023]: “Step-by-Step Manual”

Bank Statement Loan California
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Amresh Singh, CEO - HomeAbroad  by Amresh Singh

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Are you dreaming of owning a home in California but finding it difficult to qualify for a mortgage due to the lack of traditional income verification documents? Look no further! Introducing Bank Statement Loan California – the ultimate solution for all aspiring homeowners who want to secure a mortgage without the typical paperwork hassle.

With Bank Statement Loans, lenders analyze your bank statements and explore alternative methods to verify your income, making it accessible to a broader range of individuals. Say goodbye to the conventional barriers and say hello to your dream home!

Is Buying a House in California a Good Option?

Yes, if you are planning to buy a house in California, now would be an excellent time, as the median home price has gone down slightly. Here is what you should know about the California housing market:

  • In June 2023, the median home price in California experienced a decline of 1.1% compared to the previous year, reaching $798,600 for a typical home.
  • The average number of homes sold also decreased significantly, showing a decline of 21.1% year over year.
  • In June 2023, there were 26,040 homes sold, whereas in June 2022, 33,001 homes were sold.
  • Additionally, the median days on the market for homes in California was 24 days.

Can I Get a Mortgage without Traditional Documents to Verify My Income?

Yes, you can get a home loan without showing traditional documents to verify your income. There are various loans available in the market that lay flexible terms and conditions for borrowers. One such popular option is Bank Statement Loans.

However, one must provide alternate methods and substitute documents to establish their creditworthiness. Let us understand Bank Statement Mortgages in detail so that you can make the most of it!

Understanding Bank Statement Loan California

  • Bank statement mortgages are a type of home loan designed for individuals with non-traditional income sources.
  • They can be self-employed individuals, freelancers, gig workers, independent contractors, etc.
  • Instead of relying solely on traditional income verification methods like pay stubs and W-2s, these mortgages use 12-24 months of bank statements to assess an applicant’s ability to repay the loan.
  • Lenders review the applicant’s bank statements to analyze deposits and withdrawals to determine the average monthly income.
  • Bank statement mortgages often come with slightly higher interest rates compared to conventional mortgages, as they are considered riskier for lenders due to the alternative income verification.
  • Depending on the lender, the down payment requirement can vary. It may be higher than the conventional loan to offset the risk associated with alternative income documentation.
  • Applicants typically need a good credit score of 600 or more to qualify for a bank statement mortgage.
  • Some lenders may require borrowers to have sufficient reserves (savings) as a safety net in case of financial emergencies.
  • Bank statement mortgages may have different loan limits depending on the lender’s policies and the borrower’s financial profile.
  • Bank statement mortgages can be used for various purposes, including purchasing a primary residence or investment property.

It’s essential to work with a reputable lender who has experience with bank statement mortgages to ensure a smooth and successful application process. For a hassle-free process, contact HomeAbroad and connect with the most experienced mortgage lenders in California who offer flexibility and competitive interest rates on mortgages like no other.

Find the best bank statement loan lender in California.

Types of Bank Statement Loans?

There are two types of Bank Statement Mortgages:

  • Personal Bank Statement Loans: These use personal bank statements for verification.
  • Business Bank Statement Loans: These use business bank statements/ business account statements for verification.
Criteria Personal Bank Statement Loans Business Bank Statement Loans
Target Borrowers Self-employed individuals, freelancers, gig workers. Small business owners and entrepreneurs who have a significant portion of their income generated through their business activities.
Income Verification Lenders use the borrower’s personal bank statements (usually for the past 12 to 24 months) to assess their income and determine their ability to repay the loan. The lender uses the borrower’s business bank statements (typically for the past 12 to 24 months) to assess the business’s income and the borrower’s ability to repay the loan.
Calculation of Income The lender reviews the average monthly deposits in the borrower’s personal bank account over the specified period. The lender reviews the average monthly deposits in the borrower’s business account over the specified period. They may consider both personal and business deposits to calculate the qualifying income.
Eligibility Criteria Borrowers need to have a good credit score and meet other standard mortgage eligibility criteria to qualify for a personal bank statement loan. Business bank statement loans may have additional eligibility criteria, such as the age and profitability of the business, to assess the sustainability of the income source.
Personal Bank Statement Loans Vs Business Bank Statement Loans

How do Bank Statement Loans Work?

This is what you can expect from a Bank Statement Mortgage in California:

  • Lenders will determine eligibility: The lender will review your profile and bank statements to determine whether you are eligible. He will also consider factors like your credit history, DTI ratio, cash reserves, etc.
  • Need to gather additional documents for the lender review: Once it is established that you are eligible, the lender will ask you for alternate documents like asset documents, P&L statements, etc. The lender might suggest other supplementary documents to compensate for the lack of traditional documents.
  • Discussing the terms and conditions: If the lender approves you after reviewing the documents, they will collaborate to discuss and determine interest rates, loan terms, down payment, monthly repayment structure, etc.
  • Acquiring the loan: After reviewing and closing the final deal, the lender will dispense your mortgage amount, which should reflect in your bank account.

Get Quotes from the best bank statement loan lender in California.

Requirements for Bank Statement Home Loan

Here are some requirements for Bank Statement Loans that you must fulfill:

  • Proof of credit: Although lenders offer the flexibility of documents, they need some proof to ascertain your creditworthiness. For this reason, it is essential to have credit scores of 600 or above.
  • Debt-to-Income Ratio: It is important to have a DTI of 45 or lower to increase your chances of qualifying for the loan.
  • Loan-to-value ratio: For refinancing, the LTV ratio should be at least 90%.
  • Documents requirement: Along with 12-24 months of bank statements, the lenders will require Profit & Loss statements if you are self-employed for the past 2 years. They might also require asset documents, cash reserves, etc.
  • Down payment: For Bank Statement Loans, borrowers need to make a larger down payment of 10-20%. The exact percentage varies from lender to lender.
  • Ownership requirement: For business bank statements, the borrowers can own as little as 50% of the business, and for personal bank statements, it could be 25%. 

How Can I Get a Bank Statement Mortgage Loan in California?: A Step-by-Step Guide

Here is a step-by-step process for acquiring a Bank Statement Loan: California

Step 1: Finding the Right Lender

  • The flexibility of these loans depends from lender to lender. Therefore, it is important to select a lender who specializes in Bank Statement Mortgages in California and offers the best deals.
  • Doing this can ensure that you are getting a high mortgage amount for lower interest rates and down payments.
  • We at HomeAbroad, aim to connect you with the top-rated mortgage lender in the industry who prioritizes your needs and caters accordingly.

Find the best bank statement loan lender in California.

Step 2: Gathering Necessary Documents and Submitting the Application

  • Once you have decided on a lender and consulted them, gather the necessary documents like 12-24 months of bank statements, P&L statements, asset documents, cash reserves, identification documents, etc.
  • Apart from Bank Statements, P&L statements, etc., the lender might suggest additional documents to compensate for the traditional income proof.
  • Once you have gathered all the necessary documents, allow the lender to review them.
  • After your documents are approved by the lender, fill up the necessary applications.
  • Ensure to submit the final application as soon as possible to expedite the process.

Step 3: Application Approval and Closing Formalities

  • After applying, the lender will review the application.
  • Once the lender gives you the go-ahead, proceed to review the terms and conditions of the loan.
  • Carefully check the loan amount, interest rate, down payment requirements, loan term, etc.
  • Once you are satisfied with everything, do the concluding formalities and close the deal.

Step 4: Receiving the Loan Amount

  • Once everything is in order, the lender will dispense the agreed loan amount.
  • This amount should reflect in your bank account in a day or two.
  • Use this mortgage and your down payment amount to buy your new home.

Submit your bank statement loan scenario.

Alternatives to Bank Statement Mortgage Loans in California

Here are other loan options that do not require traditional income documents:

1. DSCR Loans

Debt Service Coverage Ratio is a loan program for self-employed individuals and real estate investors. This loan program utilizes the borrower’s monthly gross income from investment property to determine their debt service capacity.

You need a good credit score (620 or more) and should have enough income to cover the loan (DSCR ratio of 1 or above). You might need to make a down payment of 20-25% of the loan amount.

2. No Income Verification Loan

No Income Verification Loan is for self-employed people who don’t have traditional proof of income. Instead, they use other methods, like bank statements, to check if you can afford the loan.

You need a good credit score (620 or more) and should be able to make a higher down payment (20-25%).

3. Asset-Based Mortgage

This loan is different from traditional ones. Instead of focusing on your income, the lender looks at your assets (like stocks or real estate) to secure the loan.

You should have a good credit score (620 or more) and be able to make a down payment of 20-25%.

4. Self-Employed Mortgage

This loan is for self-employed borrowers, like contractors or business owners. Instead of using tax returns, they check your cash flow and income from 1099 forms.

You need a high credit score (620 or more) and be ready to make a significant down payment (20-25% or more).

Pros and Cons of Bank Statement Mortgages

Listed below are some advantages and disadvantages of Bank Statement Mortgages:

Advantages of Bank Statement Mortgages

  1. Faster processing: Since bank statement loans rely less on complicated income documentation, the application and approval process can be quicker compared to conventional mortgages.
  2. Ability to use multiple income sources: Borrowers with multiple streams of income can often use all relevant bank accounts to demonstrate their ability to repay the loan, which can enhance their borrowing power.
  3. Potential for higher loan amounts: Some bank statement loan programs consider the average monthly deposits over a specified period, allowing borrowers to potentially qualify for larger loan amounts based on their income streams.

Disadvantages of Bank Statement Mortgages

  1. Requirement for PMI: If the borrower makes a smaller down payment, private mortgage insurance (PMI) might be required.
  2. More involved underwriting process: The underwriting process for bank statement mortgages may be more involved compared to conventional mortgages due to the alternative income verification.
  3. Limited lender options: Not all mortgage lenders offer bank statement loans, which can limit borrowers’ choices and potentially result in fewer competitive loan terms.

To mitigate this issue, we are here to help you. HomeAbroad has a vast and diverse network of mortgage lenders who bring you only the best and most competitive deals. Connect with us today and get the best deals to buy your dream house!

Current Bank Statement Mortgage Rates: 2023

The interest rates for Bank Statement Loans vary from lender to lender. However, one can analyze the mortgage rates trends for the traditional mortgage to get an idea of the interest rates they can expect for Bank Statement Loans.

According to the recent Primary Mortgage Market Survey by Freddie Mac, the 30-Yr FRM rate was 6.96%. Whereas 15-Yr FRM was 6.3%.

US Mortgage Rates 2023
Current Mortgage Rates In US [2023] | Source: FreddieMac

Since we know that interest rates for Bank Statement Mortgages are higher, borrowers can expect an interest rate between 7.5% to 8%.

Connect with the best bank statement loan lender in California.

Where Can I Find Best Bank Statement Mortgage Lenders in California?

We understand that finding the right lenders might be a challenging task. But to help you with acquiring a mortgage without any hassle, HomeAbroad is always at your service.

To find the best Bank Statement Mortgage Lenders in California, you can contact HomeAbroad and connect with the most experienced and certified mortgage lenders who can provide the most flexible terms for the mortgage and tailor the plan to meet your unique needs.

Find the best bank statement loan lender in California.


We hope this article solved your queries regarding Bank Statment Loan California and you will make the most of this information. Remember, if you do not have traditional income verification documents, fret not! Bank Statement Mortgages can come to your rescue.

Use this guide that elaborates everything about Bank Statement Loans, and qualify for them easily!


  1. Can you get a loan with bank statements?

    Yes, if you do not have traditional documents to verify your income, you can still qualify for a mortgage by providing alternate methods of income verification, like Bank Statements. You can get Bank Statement Loans to buy a house.

  2. What is required for a bank statement loan?

    Borrowers need to present bank statements of 12-24 months. Additionally, lenders might require P&L statements, asset documents, and other non-traditional methods to establish your creditworthiness. Lenders also consider a credit score of 600 or higher and a DTI of 45% or lower.

  3. Is it hard to get a bank statement loan?

    With the right lender, acquiring a bank statement loan is a cakewalk. If you have determined your eligibility, connect with a lender on HomeAbroad to complete the remaining process. Benefit from the flexible documentation that lenders at HomeAbroad offer and easily secure a Bank Statement Loan.

  4. What is the minimum down payment for a bank statement loan?

    Down payment requirements vary from lender to lender. However, borrowers must be prepared to make a down payment of around 10-20%.

  5. Can I get a mortgage loan with only bank statements?

    In some cases, lenders require supplementary documents in the absence of traditional documents. But you can get a mortgage with only bank statements. However, this flexibility varies from lender to lender.

  6. What credit score is needed for a bank statement mortgage in California?

    A credit score of 600 or more is ideal to qualify for bank statement loans.

  7. How do Bank Statement Loans work in California?

    Bank Statement Mortgage California follows these steps: Lenders assess eligibility by reviewing bank statements, credit history, DTI ratio, and cash reserves. Additional documents may be requested to compensate for the lack of traditional income verification. Once approved, terms and conditions, including interest rates, loan terms, down payment, and monthly repayment structure, are discussed. Upon finalization, the approved funds are disbursed to your bank account, making homeownership more accessible to those without traditional documents.

  8. What interest rates can I expect with a bank statement mortgage in California?

    Interest rates for bank statement mortgages in California may vary depending on your credit score, down payment, and overall financial profile. They may be slightly higher than traditional mortgages due to the increased risk for the lender.

  9. How much can I borrow with a bank statement mortgage in California?

    The loan amount you can borrow with a bank statement mortgage in California depends on various factors, including your income, as shown in the bank statements, debt-to-income ratio, credit score, and the loan-to-value ratio.

  10. Can I use personal and business bank statements together for qualification in California?

    Yes, in some cases, lenders may allow you to combine personal and business bank statements for qualification. However, specific guidelines vary between lenders.

Amresh Singh, CEO - HomeAbroad
About the author:

Amresh Singh is the founder & CEO of HomeAbroad and has an extensive 12+ years of experience in the financial services and mortgage industry – building business development and product strategy and leading customer strategy
in the financial services industry domain.

Prior to co-founding HomeAbroad, Amresh has worked for one of
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See all articles written by Amresh»

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