The bank statement calculator estimates your qualifying income by averaging your monthly deposits over the stated period, applying an expense factor for business accounts, and then calculating the maximum loan amount based on standard debt-to-income guidelines. It then shows your estimated monthly payment including principal, interest, taxes, insurance, and any applicable mortgage insurance.

For personal bank statements, no expense factor is typically applied. For business bank statements, the default expense factor is usually 50%, meaning half of your deposits are counted as income. Some lenders accept CPA letters showing lower actual expenses, such as 30% for service-based businesses. Adjust the expense factor in the calculator to match your actual lender guidelines.

Most borrowers choose 12 months to show the most recent and potentially highest income period. However, 24-month programs sometimes offer slightly lower interest rates. Use the calculator to compare both scenarios, using the income average from each time period. If your income has grown recently, 12 months will show a higher qualifying income.

The key difference is how income is determined. A conventional calculator uses W-2 or tax return income directly, while the bank statement calculator derives income from deposit patterns. This often results in higher qualifying income for self-employed borrowers because bank deposits reflect gross revenue rather than the net income shown on tax returns after deductions.

Yes, add up your qualifying deposits for the most recent 12 months, subtract any transfers or non-income deposits, apply the appropriate expense factor, and divide by 12 to get your monthly income. The calculator then uses standard DTI ratios, typically 43-50%, to determine your maximum payment, which determines your maximum loan amount at current rates.