Non-QM worksheet
Bank Statement Income Worksheet — 12 / 24 Month
Organizes bank-statement deposits into a monthly income figure for training and file-review practice. This worksheet calculates. A lending decision is made by the investor/underwriter against their own guidelines — never by this page.
Non-QM bank-statement rules are set by individual investors and change without notice. Everything below reflects common investor expectations. Verify every rule against the specific investor's current guidelines before relying on it.
Step 1 — Gather statements
- 12 or 24 consecutive months, per the investor's program (confirm which)
- All pages of every statement — no missing pages, no gaps in months
- Personal account, business account, or both — confirm which the program allows
- Statements in the borrower's name (business account in the business name, with borrower as owner)
If a month is missing, stop. An incomplete chain can't be averaged — get the missing statement first.
Step 2 — Log every deposit
Build one row per deposit. Suggested columns:
| Month | Date | Amount | Source / description | Category |
|---|---|---|---|---|
| 1 | 03/05 | $8,200 | Client payment — ABC Co | Recurring business |
| 1 | 03/12 | $3,000 | Transfer from savings ****4412 | Transfer — exclude |
| 1 | 03/20 | $25,000 | One-time equipment sale | Irregular — document |
Categories:
- Recurring income — regular client/customer payments, consistent pattern
- Transfer — movement between the borrower's own accounts. Exclude from income.
- Irregular / large — anything atypical. Document the source; exclude unless it's documented as recurring income.
Step 3 — Identify and handle large or irregular deposits
A practical review threshold (illustrative, not a rule): flag any single deposit ≥ 50% of the running monthly average and any deposit with no clear business purpose.
For each flagged deposit:
- Source it. What is it, and where did it come from? (Paper trail: invoice, bill of sale, gift letter if the program allows, etc.)
- Decide: recurring or one-time?
- Recurring and documented → may count (investor's call)
- One-time windfall, borrowed funds, transfers → exclude
- Write the reason down. If an underwriter asks later, the note is the answer.
Common exclusions across most programs: inter-account transfers, tax refunds, one-time asset sales, borrowed funds, non-borrower deposits. The investor's guideline is the final word.
Step 4 — Apply the expense factor (business accounts)
Bank deposits are gross revenue, not net income. A business has costs. The expense factor converts deposits to an income figure.
- Personal account: many programs use 100% of qualifying deposits (no expense factor). Confirm.
- Business account: apply an expense factor. A common starting point investors use is 50% — illustrative example only. Some investors accept a different factor supported by a CPA/tax-preparer letter stating the business's actual expense ratio.
Formula:
Qualifying deposits × Expense factor = Adjusted deposits
Illustrative example (numbers made up to show the math — not a real file): $420,000 qualifying deposits × 0.50 = $210,000 adjusted deposits
Step 5 — Compute the monthly average
Adjusted deposits ÷ Number of months (12 or 24) = Monthly income figure
Illustrative example (continued): $210,000 ÷ 24 = $8,750/month
That number is an arithmetic result for training purposes. It is not a qualification finding.
Step 6 — NSF / overdraft review
Count every NSF and overdraft occurrence across the full statement period. Many investors cap the number allowed (the cap is investor-specific — look it up). Flag:
- Frequent NSFs (pattern of cash-flow stress)
- Overdrafts clustered near the end of the period (recent stress weighs heavier in review)
- Any month with negative ending balance
Record the count: ______ NSF/overdraft occurrences in ______ months.
Documentation checklist
- 12 or 24 months consecutive statements, all pages
- Proof of self-employment / business ownership (business license, CPA letter — per investor, commonly 2-year history)
- CPA letter with expense ratio, if using other than the investor's standard factor
- Written explanation + paper trail for every large/irregular deposit counted as income
- YTD profit & loss (some investors require; confirm)
Red flags to verify before the file moves
- Deposits declining sharply in recent months (trend matters — flag it, don't average it away silently)
- 1099 or tax-return income wildly different from the bank-statement figure (reconcile the gap in writing)
- Round-number deposits with no source (possible non-income transfers)
- Statements that look altered (verify directly with the bank if suspected)