How 12 vs. 24 Months Changes Your Bank Statement Deposit Average

The Quick Read: The window you choose changes both the deposits you count and the number of months you divide by. A 12-month window favors a borrower whose income is climbing, while a 24-month window favors one whose income is lumpy or seasonal. Neither is better on its own, and the right pick depends on the shape of your deposits.

• The average is eligible deposits divided by the months in the window.
• Transfers between your own accounts and loan proceeds come out first.
• Business statements take an expense factor; the window does not change that factor.
• Rising income usually favors 12 months. Seasonal or uneven income often favors 24.
• Underwriters look at trend, so the higher number is not always the number used.

The honest answer on who each option suits: the 12-month window is for the borrower whose recent year clearly beats the one before it. The 24-month window is for the borrower whose deposits swing with seasons, contracts, or one-off wins. If your deposits are flat, the two averages land close together and the choice barely matters. Across the wholesale network Lendmire works with, 12 months of statements is the common documentation baseline for bank statement files, with the longer window appearing at individual lenders’ discretion, so confirm what a given program accepts before you plan around it.

Side-by-Side

This table reflects typical program patterns. Individual lenders set their own windows, and every file is underwritten on its own facts.

How the Average Is Built

Start with the statements and work through five steps. The window only changes the second and last.

1. Choose the account type. Business accounts take an expense factor. Personal accounts are usually counted closer to face value, provided the deposits trace back to your business.

2. Pick the window. Twelve or twenty-four consecutive months.

3. Screen the deposits. Remove transfers between your own accounts, loan proceeds, insurance settlements, and other one-time items.

4. Apply the expense factor on business accounts. Scotsman Guide describes lenders applying a standard expense factor to business statements, with a profit-and-loss statement or expense letter from a third-party tax professional as an alternative.

5. Divide by the months in the window.

The expense factor is independent of the window. Choosing 24 months does not change the percentage taken off business deposits. It only changes which months are averaged. Lender factors vary, so no one percentage is safe to assume.

What One Deposit Set Looks Like Under Both Windows

Consider a contractor whose business deposits run steady for the older twelve months, then climb in the most recent twelve. Run the same statements through both windows. The 12-month average reflects only the stronger year. The 24-month average blends the older, lower months with the newer, higher ones, so it lands lower. Same borrower, same bank, a materially different starting number.

Flip the picture. Say the older year was strong and the recent year softened. Now the 24-month average looks better than the 12-month one, because the older months prop it up. That is exactly the case an underwriter scrutinizes, since the longer window can flatter a borrower relative to recent activity.

A third case: income that is flat. The two averages land close together, and the window choice has little effect. In that situation, pick whichever window your documents support most cleanly.

When the 12-Month Window Is the Better Fit

Use 12 months when your recent year is clearly your best. A business that added a contract, expanded, or recovered from a slow stretch more than a year ago gains the most. The older months simply drop out of the math.

It also suits borrowers with a shorter operating history, since 12 consecutive statements are easier to document than 24. And it fits files where the most recent year better represents what the borrower earns going forward.

The trade-off is exposure. If a single month or quarter in the window was unusually weak, that weakness carries full weight. A 12-month average also moves more when a large one-time deposit slips through screening. Rolling-window timing matters too. Applying right after a peak season can overstate a typical year, and waiting a month can swap a weak month out for a stronger one.

When the 24-Month Window Is the Better Fit

Use 24 months when your income swings. Seasonal businesses, contractors paid in large irregular chunks, and owners with several income lines often see a steadier picture across two years. One lumpy month matters half as much.

It also helps if the most recent year had a dip you view as temporary. Blending in the earlier year can lift the average. But that is where underwriters push back. A file whose recent months run well below the two-year average invites questions about trend, and a lower recent figure may carry more weight than the blended one.

The cost is dilution. If income is rising, the older, lower months pull the average down. Borrowers sometimes pick 24 months for safety and then find it costs them qualifying income they had earned.

What Moves the Average That People Overlook

• Outliers. One large deposit moves a 12-month average about twice as much as a 24-month one. That cuts both ways, and underwriters watch for it.
• Exclusions. Deposits removed in screening shrink the numerator in whichever window you use. A borrower who moves money between accounts often is surprised by how much comes out.
• Partial histories. Fewer than 12 months of statements is a different conversation, and options are limited.
• Ownership share. Where you own part of a business, income typically scales to your percentage.
• Commingled deposits. Mixed personal and business use can push deposits out of the count or raise the effective expense factor.

Why the Higher Number Is Not Always the Number

A common tip is to run both windows and take the better one. It is incomplete advice. Underwriting on non-QM files is largely manual, as Scotsman Guide notes, which means a person weighs whether your average represents your real earning power.

A flattering 12-month figure can be discounted if it rests on one unusual quarter. A strong 24-month figure can be set aside if recent deposits have slid. In practice, the strongest files are the ones where the average, the trend, and the story all agree. Many programs also review overdrafts, returned items, and unusual activity alongside the average.

Where DSCR Fits Instead

Bank statement income proves the borrower’s earnings. It is a different test from a DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. If your deposits are uneven or declining, a DSCR structure on a rental purchase may be the cleaner route, since the file leans on the property rather than your deposit average. Lendmire’s complete DSCR loans guide lays out how that works.

Occupancy decides the paperwork regime. A bank statement loan on an owner-occupied home is a consumer mortgage, so TRID disclosures apply. On a non-owner-occupied rental, including a short-term rental, the loan is business-purpose and exempt from TRID. The CFPB’s Truth in Lending summary lists credit extended primarily for a business purpose among the exempt transactions. Keep the two straight when planning.

Leverage also differs by occupancy. On a primary residence, bank statement purchase and rate-term files go up to 90% LTV through select lenders, and stronger files earn the top of that range. Owner-occupied cash-out runs up to 80% LTV with a fixed expense ratio (75% with an accountant-prepared ratio). Investment-property cash-out tops out around 75% LTV. Investment purchases on bank statement documentation vary by lender. Loan sizes typically run from $125,000 to $3,500,000, with reserves commonly around six months. All of this is subject to lender guidelines and individual underwriting. For a related comparison, see Lendmire’s piece 12 vs 24 Months of Statements: Which Bank Statement HELOC Fits?.

Run Both Calculations Before You Call

1. List twelve or twenty-four months of deposits by account.

2. Strike transfers, loan proceeds, and one-time items.

3. Apply an assumed expense factor to business deposits only.

4. Divide by 12, then by 24.

5. Compare the two, then look at the last six months against both.

If the recent months sit well above one average and below the other, expect questions. Have a short explanation ready, plus a profit-and-loss statement from a tax professional if your expenses run below a flat factor.

If You Are Self-Employed and Weighing Your Options

If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Reach the team at 828-256-2183. Qualification is on documented income under the applicable program, subject to lender guidelines. This is not a commitment to lend. Tax treatment can depend on how funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.

References

1. Scotsman Guide, “Rev Up the Engine for Non-QM Lending”

2. Scotsman Guide, “Helping borrowers fit the boxes by getting hands-on with non-QM”

3. CFPB, Truth in Lending Act summary