How bank statement lenders read your deposits

A conventional mortgage documents income with W-2s, pay stubs and tax returns. For a self-employed borrower those understate earnings by design: the whole point of deducting business expenses is to lower taxable income, and the number left at the bottom of a return is not what the household actually lives on.

A bank statement program answers that by documenting income from deposits instead. These sit in the non-QM category — non-qualified-mortgage, meaning the loan is not written to the federal Qualified Mortgage template and the lender underwrites to its own published guidelines. That is the only time this guide uses the term.

Angel Oak's program page describes statements over 12 or 24 months, from business or personal accounts (Angel Oak Mortgage Solutions, bank statement program page, checked 2026-09-21). Griffin Funding publishes the same structure on its bank statement loans page (Griffin Funding, bank statement loans page, checked 2026-09-21). Both are lenders describing their own programs, which is the only kind of source in this guide.

The core calculation is the least mysterious part of the process. Griffin Funding's calculator page states it as total deposits over the 12 or 24 month period, divided by the number of months in that period (Griffin Funding, bank statement loan calculator page, checked 2026-09-21). That gives a monthly average of deposits — not yet a monthly income figure.

The second step is the expense factor, and it is where most of the number goes. Angel Oak publishes a default expense factor of 50%, with some industries at 70%, and names a statement from a third-party CPA, tax preparer or bookkeeping company as what lowers that factor (Angel Oak Mortgage Solutions, bank statement program page, checked 2026-09-21). Griffin Funding describes the same shape from the other side: for a business account, deposits are typically counted at 50%, while a personal account may be counted at up to 100% (Griffin Funding, bank statement loans page, checked 2026-09-21).

Deephaven's correspondent guideline matrix dated 2023-01-19 lists three ways the expense side can be established: a flat 50% expense ratio, a third-party prepared expense letter, or a third-party prepared profit-and-loss statement (Deephaven Mortgage, correspondent guideline matrix, checked 2026-09-21). The matrix also states that personal and business statements are not combined — a program using one does not add the other on top.

That gap is why the third-party letter exists as a product at all. Published prices run from $199 to $500, and firms that bill hourly for it publish minimums above $1,000 (Not Your Dad's CPA, limited-letter page, $500; Nelson CPA, comfort-letter page, $500 per hour with a $1,000 minimum; both checked 2026-09-22). It is worth knowing the number both ways before anyone quotes you for one.

Not every dollar that lands in the account counts. Griffin Funding's page names transfers between your own bank accounts, and cash or large deposits, as amounts excluded or flagged, with a letter of explanation commonly asked for on the flagged ones (Griffin Funding, bank statement loans page, checked 2026-09-21).

The logic is the same in each case. A transfer from your savings to your checking is the same dollar counted twice; a one-off deposit far outside your normal pattern is not evidence of monthly income until something explains it. Deephaven's matrix separately notes that NSF activity may draw a letter of explanation (Deephaven Mortgage, correspondent guideline matrix, checked 2026-09-21).

None of these is a problem in itself. They become a problem when they are discovered by someone else, late, in a stack of statements you have not read. Finding them first is the entire value of reading your own statements before you hand them over.

Every program we read offers both. Angel Oak's page describes 12 or 24 months of statements (Angel Oak Mortgage Solutions, bank statement program page, checked 2026-09-21), and Griffin Funding's calculator page divides by 12 or 24 depending on the period used (Griffin Funding, bank statement loan calculator page, checked 2026-09-21).

The practical difference is what the longer window does to an uneven year. Twenty-four months of deposits averages a strong year against a weak one; twelve months averages only the last twelve. Which one reads better depends entirely on the shape of your own deposits, and it is a question for whoever is handling your application, not for a web page.

SoloSteady covers 12 consecutive months. That is what the $79 summary documents, and the reason it is a fixed number rather than an option is that a document whose period the buyer chooses is a document whose period was chosen for a reason.

You can do all of this with your bank's own export and a spreadsheet. The point is not to produce a document; it is to know, before anyone asks, what your deposits say.

1. 01

   Pull 12 consecutive months from one institution

   Consecutive matters. A gap month is a hole in the record that has to be explained, and statements from two banks stitched together are two records, not one.

2. 02

   Separate earnings from movement

   Mark every line that is a transfer from another account you own, a refund, or a loan. Those come out of the total before you divide.

3. 03

   Total what is left, divide by 12

   That is the monthly deposit average, the same figure the calculator page describes.

4. 04

   Halve it, then look at it again

   At the published 50% default factor, that is the figure a program reads off a business account. Seeing it early is uncomfortable and useful in the same moment.

5. 05

   Write down what you would say about the odd lines

   For every deposit you had to think twice about, write one sentence naming what it was. Your summary lists the ones above half your monthly figure and the months carrying an overdraft fee, so the list is already made. That is the letter of explanation, in draft, months before anybody asks for one.

SoloSteady does steps one through four for you, from the bank's own data rather than a file you typed. You connect a checking or savings account through a read-only connection, 12 consecutive months of deposits are read and classified, transfers and refunds are set aside, and you get the monthly average, both expense-factor readings, and a month-by-month ledger showing exactly which deposits were counted. It costs $79 once, you download the PDF, and you submit it yourself. SoloSteady does not send it to anyone.