Self-employed
Use bank statements to show what you earn
For business owners and 1099 earners whose tax return does not tell the whole story.
Written by Allen Hong, NMLS 1295255·Last updated: October 8, 2026
Who this is for
This is for people who own a business or are paid on a 1099, when business expenses make taxable income look smaller than the money coming in.
How qualifying works
- Income is typically documented with 12 or 24 months of personal or business bank statements.
- The lender is looking at deposits that represent income, not the closing balance and not every line on the statement.
- A lender may still ask for tax returns or other records. This is not a no-documentation loan.
| Bank statements | 1099 | |
|---|---|---|
| What shows the income | Eligible deposits over the months the lender requires, often 12 or 24. | The 1099 forms that report what you were paid for the work. |
| When it tends to be the closer look | Revenue is deposited regularly, and write-offs make the tax return look smaller than the deposits. | You are paid as a contractor and the 1099s cover the period a lender wants to see. |
| What is still reviewed | Transfers and deposits that are not income are often removed. Expenses are factored in. | Expenses still have to be accounted for. Other records may be requested. |
Someone paid on a 1099 can fit either path. The form and the deposits answer different questions, and a lender chooses which file it will review.
Deposits, transfers, and expenses
Eligible deposits are the ones a lender treats as business revenue. A consistent pattern of customer payments is the usual starting point. A large one-time deposit is not automatically income.
Transfers between your own accounts are often excluded, because the money was already counted somewhere else. Loan proceeds, tax refunds, and gifts are common examples of deposits that are not revenue. Ask which deposits would be left out before you add up the statements yourself.
Business expenses are the reason the deposit total is not treated as take-home pay. A lender may apply an expense factor or review the expenses. Personal and business accounts are not interchangeable: personal statements fit when the income is deposited into a personal account, and business statements fit when the revenue lands in the business account. Ownership share can change how much of a business account counts.
What you'll need
- Bank statements
- Photo identification
- Proof of business ownership
- Housing history
- Information about reserves