12 vs. 24 Month Bank Statements for a 1099 Commission Earner

The Quick Read: Choose 12 months of bank statements when your commissions have been rising or your business is newer, and choose 24 months when your income is lumpy, seasonal, or flat, because a longer window smooths the swings that one hot or cold stretch creates. The window is set by the program, so the practical question is what the lender will accept and which number it produces for you.

• Twelve months favors a recent climb in deposits. Twenty-four months favors an uneven pattern.
• The lender averages your eligible deposits, so the same bank history can produce two different income figures.
• The lender, not you, sets the expense factor on business accounts.
• On a rental purchase underwritten on rent coverage, the 12-or-24 choice usually does not decide income at all.

The Honest Answer: Who Each Window Is For

The 12-month window suits a commission earner whose recent year beats the one before it. Maybe you moved to a better pay plan, joined a stronger team, or finally hit your stride. The window isolates that stronger stretch. The 24-month window suits someone whose closings cluster unpredictably, who had a great quarter followed by a dry one, or whose income has been steady for years. More months mean fewer surprises in the average.

Neither is safer or better by default. Direction matters. Rising income usually looks best on 12 months. Falling income shows up starkly on 12 months, though underwriters read the trend as well as the average on any window. Scotsman Guide describes the product as a non-QM loan for a self-employed borrower without a W-2, who supplies 12 to 24 months of personal or business bank statements. Across the wholesale network Lendmire places files with, 12 months of statements is the documentation basis. The 24-month column below reflects published industry norms, which vary by lender.

Side-by-Side

Property type and vesting depend on the program, not on the length of the window. Qualification on any file stays subject to lender guidelines, credit, and property review.

How a Lender Turns Statements Into Income

Underwriters follow roughly the same steps whichever window applies.

1. Pick the account. Personal statements fit income that lands in your own name. Business statements fit income that runs through an entity.

2. Gather consecutive statements. No skipped months. If an old account has closed, ask for archived copies early.

3. Screen the deposits. Underwriters total eligible deposits and remove non-income credits. Typical removals include transfers between your own accounts, loan proceeds, and refunds.

4. Apply the expense factor. On business statements, the lender calculates qualifying income using a standard expense factor. It may accept a profit-and-loss statement or an expense statement from a third-party tax professional instead. You do not choose the factor. Some programs treat personal accounts differently, and that is a lender-by-lender call.

5. Average over the window. The total divides by 12 or 24. That monthly figure is your qualifying income.

Non-QM does not mean skipped underwriting. Lenders still confirm that you can repay the loan. They just have more flexibility in how they measure income.

When 12 Months Is the Better Fit

Pick the 12-month window when the most recent year tells your real story.

• Your income climbed. If your latest year ran well above the prior one, 24 months drags the average down with older, smaller deposits.
• You changed pay plans. A better split, a bigger territory, or a new brokerage can make the older months misleading.
• Your history is short. A newer 1099 earner may simply not have 24 clean months in the same account.
• You want lighter paperwork. Half the statements means half the deposits to explain.

The tradeoff is real. A short window gives up older data. If your best year included one outsized deal, the 12-month window can look better on paper than your normal run rate, and the underwriter may notice.

When 24 Months Is the Better Fit

Pick the 24-month window when volatility is the problem and not the trend.

• Closings cluster. Real estate, insurance, and enterprise sales often pay in bursts. Twelve months can land on a peak or a gap. Twenty-four months gives each more company.
• You have a flat but dependable record. If year one and year two look alike, the longer average costs you nothing and shows consistency.
• One recent slow stretch. A weak quarter hurts a 12-month average more than a 24-month average.
• Seasonality runs your year. Two full cycles show the pattern repeats.

The tradeoff runs the other way. A longer window gives up your recent growth, and it asks for twice the records. If your income is falling, the longer span may soften the average, but a lender may weigh the recent months heavily anyway. That scenario is covered in Lendmire’s piece 12 vs 24 Month Bank Statements When Income Declined.

Why Commission Income Behaves Differently

A salary lands every two weeks. Commissions do not. Four patterns trip up commission earners most often.

• Lag. A deal closes in March and the check arrives in April. A 12-month window can quietly drop or double-count a payout depending on where the window starts.
• Clawbacks and chargebacks. A returned commission shows up as an outflow or a reduced deposit. Underwriters notice.
• Bonus checks. Quarterly or annual payouts are big single deposits. Expect a request for a written explanation or the underlying pay statement.
• Multiple payers. Several brokerages, carriers, or platforms mean several deposit sources. Clean labeling helps.

Trade press treats high-commission salespeople as classic borrowers who struggle to document income the traditional way. That is exactly why these programs exist.

Same Deposits, Two Windows

Run both windows before you commit. The pattern below is illustrative only, using relative changes and not real figures.

The decision rule is short. If your last 12 months beat your prior 12, start with the 12-month window. If your deposits swing, ask for the 24-month view. If one huge deposit is carrying a year, expect it to be questioned on either window, and have the closing or pay statement ready. In any case, a lender may ask for an explanation of a down stretch.

Does the Window Matter on a Rental Purchase?

Often it does not, and many 1099 earners miss this. A DSCR loan (debt service coverage ratio loan) qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your 12 or 24 months of deposits are not averaged into income. Statements are used to source your down payment and reserves. The complete DSCR loans guide walks through that structure.

DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. Federal rules exempt credit extended primarily for a business purpose, and the creditor decides the primary purpose case by case.

Occupancy decides the disclosure regime. An owner-occupied bank-statement loan on a primary residence or second home is a consumer mortgage, and TRID disclosure rules apply. A bank-statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from TRID. Never mix the two when you plan a deal.

The window does matter when your personal income is the qualifier. That includes a primary residence purchase, a rate-and-term refinance, or a cash-out on a home you live in. A bank-statement loan also counts in your debt-to-income picture for later purchases, while a DSCR loan generally does not rely on personal DTI. Lendmire’s piece DSCR Loan Vs Bank Statement Loan For Investors covers when each path fits.

What the Leverage Looks Like

Program figures are typical ranges from select lenders in Lendmire’s wholesale network and are subject to lender guidelines.

• Primary residence purchase or rate-and-term refinance: up to 90% LTV (loan-to-value), with stronger files earning the top of the range.
• Owner-occupied cash-out, primary residence or second home: up to 80% LTV, using a fixed expense ratio (75% with an accountant-prepared ratio), by loan size and credit.
• Investment-property cash-out: tops out around 75% LTV.
• Investment purchase on bank-statement documentation: varies by lender. Investor-focused leverage guidance belongs to the DSCR side.
• Asset-depletion alternative on a primary residence: up to about 80% LTV, qualifying from liquid assets.
• Loan amounts and reserves: roughly $125,000 to $3,500,000, with reserves commonly around 6 months of the housing payment.

Consumer mortgage licensing for owner-occupied files covers 16 states. Qualification rests on documented income under the applicable program, subject to lender guidelines. Credit performance keeps lenders careful here. Scotsman Guide reports, citing dv01 data, that impairments keep growing in the self-employed bank-statement segment, so expect clean-file scrutiny.

Preparing Your File (the 60-to-90-Day Cleanup)

Start two or three months before you apply.

• Separate accounts. Route commission checks to one account. Keep personal spending in another.
• Stop internal transfers between accounts you plan to document. They clutter the deposit screen.
• Build a deposit ledger. Next to each large deposit, note the payer and the closing or pay statement behind it.
• Avoid overdrafts. Programs have their own rules on NSFs and large unexplained deposits.
• Keep supporting paper. 1099 forms, closing statements, and commission statements help explain lumps.
• Check your history. Window length and time self-employed are separate requirements. Having 14 clean months does not by itself satisfy a program that wants more history.

One broker-level observation: files from commission earners tend to stall on explanations, not on math. A deposit that is easy to explain with a document rarely becomes a problem. An unlabeled one can.

Key Terms Defined

Bank statement loan: a non-QM mortgage that qualifies a self-employed borrower on averaged deposits and not on traditional personal-income documentation.

Expense factor: the percentage of business deposits a lender treats as operating cost before counting the rest as income.

Non-QM: a loan that does not meet the standards for Fannie Mae and Freddie Mac purchase, often used for borrowers with non-traditional income.

DSCR: debt service coverage ratio, meaning the property’s rent divided by its monthly obligation.

The Balanced Verdict

Use 12 months if your income rose, your pay plan changed, or your history is short. Use 24 months if your commissions swing, your year is seasonal, or a single slow quarter would unfairly drag a short average. If income is falling, expect both windows to be read for trend, and be ready to explain it. If you are buying a rental, ask first whether DSCR lender review makes the question moot.

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.

This article is general education, not legal or tax advice. Tax treatment can depend on how the 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. Consult a qualified attorney or CPA about your own situation.

About Lendmire

Lendmire (NMLS# 2371349), a non-QM mortgage broker serving investors in 41 markets including Washington, D.C., helps structure DSCR scenarios commonly evaluated around a property’s rental income rather than personal income paperwork, subject to lender guidelines. A Scotsman Guide Top Mortgage Workplace in 2025 and 2026, Lendmire places loans through wholesale investor lenders and is not a direct lender.

References

1. Scotsman Guide: Rev Up the Engine for Non-QM Lending

2. Scotsman Guide: Don’t Shut the Door on Quality Borrowers

3. eCFR: 12 CFR 1026.3, Exempt Transactions

4. Scotsman Guide: Non-QM gaps widen between full-doc and alt-doc loans