How to Buy a House with Tax Write-Offs: The 2026 Guide to Bank Statement Loans
Jhenesis Mortgage | Updated December 30, 2025
The Self-Employed Trap
You grossed $200,000+ last year, but thanks to smart tax write-offs, your taxable income shows only $40,000. Big banks see that low number and deny your mortgage application. This is the reality for thousands of successful entrepreneurs, freelancers, and 1099 workers every year.
The solution? Bank statement loans – the “Entrepreneur’s Mortgage” that qualifies you based on your actual cash flow, not the bottom line of your tax returns.
While traditional lenders are stuck with outdated qualified mortgage (QM) rules, Jhenesis Mortgage leverages modern 2026 non-QM guidelines to get self-employed borrowers approved faster.
How Bank Statement Loans Work
Instead of requiring tax returns, we review 12 or 24 months of bank deposits to calculate your qualifying income.
The Expense Factor: Lenders apply an industry-specific percentage to your total deposits:
- Consultants/IT/Freelancers: Often 80–100% of deposits
- Real estate agents/commission-based: 70–90%
- Restaurant owners/retail: Typically 50–70%
Personal vs. Business Accounts: Personal bank statements often allow 100% of deposits; business statements require separating expenses.
2026 Eligibility Checklist
- Credit Score: Minimum 620–660; 700+ unlocks the best non-QM rates
- Time in Business: At least 2 years of self-employment (1099s, business license, or DBA)
- Down Payment: 10–20% typical (higher credit/lower LTV = better rates)
- Reserves: 3–6 months of PITI (Principal, Interest, Taxes, Insurance) in liquid assets
Common Red Flags to Avoid
- Large undocumented deposits – must be sourced and seasoned
- NSF (bounced checks) – even 1–2 can cause denial
- Declining deposit trend – recent 3 months weigh heavily
Quick FAQ (Featured Snippet Targets)
Can I get a mortgage using bank statements?
Yes! Bank statement loans allow self-employed borrowers to qualify using 12 or 24 months of bank deposits instead of tax returns.
How to qualify for a house with 1099 income?
Non-QM bank statement loans use your gross deposits (adjusted by an expense factor) to determine qualifying income for freelancers and 1099 workers.
Why did my bank deny my mortgage as a business owner?
Big banks rely on net income from tax returns, which is often lowered by legitimate write-offs. Bank statement loans look at actual cash flow via deposits.
Are bank statement loan rates higher?
Yes, typically 0.5%–2% higher than conventional loans. As of December 2025, conventional 30-year rates average around 6.3%, so bank statement rates often range from 6.8%–8.3% depending on credit and other factors. The trade-off allows you to qualify and buy now.
Free Income Estimator Tool
Enter your total deposits and industry to see your estimated monthly qualifying income.
Download: Non-QM Document Checklist
Get our free PDF checklist – everything your CPA needs to prepare before applying.
Ready to See If You Qualify?
No hard credit pull – just a quick eligibility check and personalized rate quote.
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