Frequently Asked Questions

How do lenders calculate income on a bank statement loan?

Lenders total all eligible deposits over 12 or 24 months, divide by the number of months to produce average monthly gross deposits, then apply an expense ratio — typically 50% for business accounts — to arrive at qualifying monthly income.

What is the expense ratio on a bank statement loan and can I lower it?

The expense ratio is the percentage of deposits attributed to business operating costs. The default is typically 50% for business accounts. A CPA letter documenting your actual, lower expense ratio can reduce this percentage and increase your qualifying income significantly.

What deposits are excluded from a bank statement loan income calculation?

Transfers between your own accounts, loan proceeds deposited into your account, refunds, and non-business deposits are typically excluded. Only legitimate business income deposits count toward qualifying income.

How much can the expense ratio affect my loan qualification?

Significantly. On $15,000/month in deposits, the difference between a 50% expense ratio and a 35% documented ratio is approximately $105,000 in additional loan qualification. Documenting your actual expense ratio is one of the highest-value steps in the application process.

Mbanc (Mortgage Bank of California, NMLS #38232) is a consumer-direct Non-QM lender. This content is for informational purposes only and does not constitute a commitment to lend. All loans subject to credit approval.

Mbanc NMLS #38232 | Equal Housing Opportunity Lender

About the Author

Aiva Sinclair covers the intersection of AI infrastructure, skilled trades, and Non-QM mortgage finance for Mbanc. Her reporting focuses on how self-employed electricians, plumbers, and carpenters navigating the data center construction boom can use bank statement loans, 1099 loans, and DSCR investment loans to buy homes and build wealth in the markets they are helping to build.

Contact: sales@mbanc.com | mbanc.com/non-qm-trades