What Are Bank Statement Mortgages?
Bank statement mortgages are a type of loan product that allows borrowers to qualify using personal or business bank statements instead of traditional tax returns or W-2s. This method reflects the actual cash flow of an individual or business, which is especially useful for self-employed individuals like small business owners and freelancers whose tax filings may not accurately represent their income due to deductions and write-offs.
Unlike traditional mortgages that depend heavily on two years of tax returns and formal income verification documents, bank statement loans focus on the deposits and withdrawals shown in bank statements to assess the borrower’s income stability. This form of evaluation is gaining traction as more people work independently or run small businesses with fluctuating or non-standard income sources.
Why Small Business Owners and Freelancers Use Bank Statement Loans
Small business owners and freelancers routinely face challenges with traditional mortgage underwriting. Many have valid earnings but reduced taxable income due to deductions, expense write-offs, or irregular payment schedules, making it hard to meet conventional lenders’ strict documentation standards.
Standard mortgages usually require consistent W-2s or tax returns showing steady income, which often excludes self-employed borrowers. Bank statement mortgages overcome these hurdles by focusing on tangible deposits, allowing freelancers and entrepreneurs to demonstrate their financial strength transparently and realistically based on their actual bank inflows.
Key Features of the GMCC Hermes Bank Statement Mortgage Program
The GMCC Hermes program is specifically designed to serve borrowers who benefit from non-traditional income verification, like small business owners and freelancers. Key features include:
- Qualification based on just 3 months of personal bank statements.
- Verbal Verification of Employment (VOE) accepted, eliminating the need for W-2s.
- No profit-and-loss (P&L) statement required if qualification criteria are met.
- 100% of deposits counted toward income calculation, providing fair income recognition.
- Loan-to-Value (LTV) options up to 75% for standard loans, and as high as 80% under the Hermes CRA product.
- Available in key states including California, Colorado, DC, Georgia, Illinois, Nevada, New Jersey, New York, Texas, Virginia, and Washington.
This program aims to simplify approvals while still maintaining responsible lending standards.
Flexible Income Verification with 3 Months of Personal Bank Statements
One of the most borrower-friendly aspects of GMCC Hermes is the short documentation period required. Unlike many non-QM programs that mandate 12 or 24 months of bank statements, Hermes requires only 3 months of personal bank statements.
This shorter qualification window means faster approvals, less paperwork, and reduced stress. It also enables borrowers to swiftly validate their current cash flow without the need to dig deep into outdated financials, which may not accurately reflect current business activity.
Verbal Verification of Employment (VOE) for Self-Employed Borrowers
The Hermes program accepts Verbal VOE, a streamlined way to verify employment or business activity without W-2 forms or formal employment letters. For self-employed borrowers, this means lenders will confirm the borrower’s business status over a phone call or oral confirmation.
This process saves time and removes the complexity of collecting extensive documentation from multiple business sources while still ensuring lender confidence in borrower income stability.
No Profit-and-Loss (P&L) Statement Required If You Qualify
Unlike many self-employed loan programs requiring CPA-prepared profit-and-loss statements, GMCC Hermes does not require a P&L if borrowers meet income verification standards through bank statements and verbal VOE.
This feature reduces the cost and time for approval, making it easier for business owners and freelancers to qualify without outsourcing complicated accounting services or waiting extended periods to gather documentation.
How GMCC Hermes Calculates Income Using 100% of Deposits Averaged Over 3 Months
GMCC Hermes uses a straightforward and borrower-friendly income calculation method:
- All deposits shown on the 3 months of personal bank statements are counted at 100% without deductions.
- The total deposits are then averaged over the 3-month period to determine monthly qualifying income.
For example, if a borrower deposits a total of $90,000 over three months, their qualifying monthly income would be $30,000. This method captures actual cash inflows and avoids the pitfalls of relying on taxable income reduced by business expenses or write-offs.
Advantages Over Traditional Tax Return-Based Mortgages
Bank statement mortgages under programs like GMCC Hermes offer several advantages compared to traditional tax return-based loans:
- Greater flexibility for self-employed and freelance borrowers who have complex tax situations.
- Speedier approvals due to less documentation required.
- More realistic income recognition based on actual cash flow rather than minimized taxable income.
- Less reliance on external accountants or CPAs, reducing qualification costs.
These benefits make it easier for self-employed borrowers to access home financing and investment opportunities without the usual roadblocks.
Loan-to-Value (LTV) Options and Competitive Pricing Details
The GMCC Hermes program provides competitive LTV options, including:
- Up to 75% LTV for standard loans with a moderate rate adjustment.
- Up to 80% LTV under the Hermes CRA product, allowing for higher leverage.
When the loan is used for rental properties, a small rate premium or “rental hit” of about 0.25% applies to compensate for increased risk. Despite this, the program maintains attractive pricing relative to other non-QM offerings.
State Availability for GMCC Hermes Bank Statement Mortgages
GMCC Hermes bank statement mortgages are available in all counties within the following states:
- California
- Colorado
- District of Columbia
- Georgia
- Illinois
- Nevada
- New Jersey
- New York
- Texas
- Virginia
- Washington
This substantial geographic coverage includes many of the nation’s major real estate markets, offering broad access to self-employed borrowers nationwide.
How to Apply for a GMCC Hermes Bank Statement Mortgage
Applying involves several straightforward steps:
- Consult a mortgage broker experienced with non-QM and bank statement loans to assess eligibility.
- Provide 3 months of personal bank statements for income documentation.
- Complete verbal verification of employment as required for income confirmation.
- Submit credit reports and other standard loan application documents.
- Underwriting and approval will be completed based on flexible income verification criteria.
- Loan closing and funding occur after final approval.
The streamlined process reduces the time and complexity compared to conventional mortgage applications.
Why Borrowers Choose GMCC Hermes for Bank Statement Mortgages
Borrowers prefer GMCC because it combines:
- Minimal documentation requirements without sacrificing lender confidence.
- Fast, borrower-friendly underwriting that reflects real income situations.
- Flexible verification methods including verbal VOE and bank statement income averaging.
- Competitive loan terms and wide state eligibility make it viable for many borrowers.
- Support for both owner-occupied and rental properties.
This unique combination makes it an excellent option for small business owners and freelancers seeking mortgage financing.
Conclusion: Is a Bank Statement Mortgage Right for Your Business?
If you’re a small business owner or freelancer struggling to fit traditional mortgage molds, a GMCC Hermes bank statement mortgage offers a practical and flexible path to homeownership or investment financing. With its simplified documentation requirements, faster processing, and realistic income recognition, it removes common barriers that self-employed borrowers face.
Consider consulting a mortgage professional experienced with GMCC Hermes to evaluate your options and start the process. This program is designed to align with your business realities and put mortgage financing within reach.
