12 vs. 24 Month Bank Statements When Deposits Shifted This Year

The Quick Read: The 12-month window usually fits a borrower whose deposits climbed recently, and the 24-month window usually fits one whose income swings by season or whose best stretch sits earlier. Both average deposits, so the window length changes the coverage figure whenever deposits moved. Across Lendmire’s wholesale network, the window on offer is set by each lender’s program sheet, not by one standard rule, and every file is underwritten individually.

• A longer window smooths seasonal swings and one-time spikes.
• A shorter window helps when recent months are the strongest.
• Deposits that rose late or dropped late are the cases where the choice moves the number most.
• Unsourced transfers and lump sums are typically screened out under either window.
• A rental purchase held for investment may not need a personal income window at all.

The Honest Answer: Who Each Window Is Really For

Neither window is better in the abstract. The 12-month window is for the borrower with a rising trend, a newer business, or a strong recent stretch. The 24-month window is for the borrower with seasonal revenue, lumpy contract work, or a strong period that now sits in the older half of the file.

Some programs publish both windows. Others publish only one. A borrower should not assume the choice is theirs. Where both exist, the sensible approach is to run both averages and see which one holds up under scrutiny, not which one looks biggest.

Bank statement loans are a non-QM product. Scotsman Guide describes them as letting self-employed borrowers qualify on actual income rather than the figure on a tax return. Across the programs the network places files with, qualifying income comes from deposit averages after a lender-specific expense factor. No universal formula exists.

Side-by-Side

The 24-month column below reflects published industry norms, since individual lenders set their own program sheets. The 12-month column reflects the network’s typical guideline for this lane.

Reserves and loan size follow the same program sheets. Loan amounts on this lane typically run from $125,000 to $3,500,000, subject to lender guidelines.

How the Average Actually Gets Built

The window length is the divisor. That one fact drives most of the difference.

1. Choose the account. Statements can be personal or business. A general explainer from Kubera notes that business programs apply an expense factor to gross business deposits, while personal programs may count more of each deposit but need identifiable business sources.

2. Screen the deposits. Transfers between accounts, loan proceeds, asset sales and settlements are typically removed. Large unexplained deposits draw document requests.

3. Apply the expense factor. This is the share of gross deposits assumed to go to operating costs. Factors are lender-specific, and an accountant-prepared ratio may support a lower expense assumption on some programs.

4. Average across the window. Total eligible deposits, less expenses, divided by 12 or 24.

5. Test the other debts. Personal debts enter the test on a bank statement file. Strong deposits do not rescue a heavy debt load.

Scotsman Guide also recommends stabilizing income with a bank-statement desk before a purchase contract is signed. That is a habit worth copying. A file that gets tested early rarely surprises anyone later.

When the 12-Month Window Is the Better Fit

Pick 12 months when the recent trend is the true story and the older months would only dilute it.

Deposits rose this year. Picture a contractor who landed larger accounts ten months ago. The prior 12 months reflect the new run rate. The 24-month average blends in a weaker year that no longer describes the business.

A newer business. With only a year of history, 12 months may be the only window available. Underwriters will look harder at consistency within that year.

A slow stretch sits in months 13 through 24. If last year was the soft one, the shorter window leaves it out.

The caution runs the other way too. A strong 12-month average built on two huge months and ten ordinary ones will get questioned. Underwriters look at the trend, not only the total. A late spike that is not repeatable is a weak foundation under either window.

Leverage on this lane is also worth knowing. On a primary residence, purchase or rate-term, select lenders go up to 90% LTV, with the top of the range going to stronger files. Owner-occupied cash-out on a primary or second home tops out at 80% LTV, with a fixed expense ratio and 75% where an accountant-prepared ratio is used. Subject to lender guidelines, credit and loan size.

When the 24-Month Window Is the Better Fit

Pick 24 months when volatility is the story and a longer average is the more honest one.

Seasonal income. Landscapers, event vendors and tax preparers can show wild month-to-month swings. Two years of deposits show the full cycle twice, which is easier for an underwriter to trust.

A strong earlier stretch. If the best income sat in months 13 through 24 and this year dipped, the longer window may carry a higher average. That helps the number. It also invites a question: why did income fall? Have the explanation ready.

One-time spikes. A single large deposit that survives screening moves a 12-month average more than a 24-month one.

A recent decline is the hard case. Under either window, a downward trend in the latest months is a red flag, because underwriters care about current income, not only the average. A BiggerPockets forum reply makes the same point anecdotally and suggests a DSCR loan on the rental instead. Treat it as one investor’s opinion, not a rule.

When the Two Windows Disagree

When the averages differ sharply, do not just take the higher one. Ask three questions.

• Is the gap explained by one deposit or a short run of months? If yes, expect that deposit to be sourced or removed.
• Does the trend support the higher number? A rising line supports the 12-month figure. A falling line undercuts it.
• Can the borrower document the reason for the shift? Client contracts, invoices, a lost account, a new contract, a change in business structure.

A short written explanation helps the file. It should state what changed, when, and why the current level is sustainable. It should not argue. Underwriters read a plain, documented account more kindly than a pitch.

Mixed account setups add one more wrinkle. Scotsman Guide notes that if an underwriter does not look at all of a business’s accounts, the borrower might not qualify. If only one account shifted, include the full picture.

Occupancy Decides Which Rules Apply

Occupancy changes the whole disclosure regime. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage, and consumer disclosure rules apply. Income verification on those files rests on reasonably reliable third-party records, as the CFPB’s compliance guide lays out.

A loan on a non-owner-occupied rental, including a short-term rental, is a business-purpose loan. The Federal Register preamble says investment-purpose loans are treated as business-purpose, and those files are exempt from TRID. Investment-property cash-out on bank statement documentation tops out around 75% LTV. Investment purchase leverage varies by lender.

Many self-employed investors end up using two products: bank statements for the home they live in, and a DSCR loan for the rentals, where qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines.

Where Files Break When Deposits Shifted

Most problems are paperwork, not math.

• Unsourced deposits. A large deposit with no paper trail gets pulled from the average.
• Missing accounts. Leaving out an account that held business deposits shrinks the number or stalls the file.
• Stale explanations. A letter that does not match the statements creates more questions.
• Assuming the window is a choice. Some programs offer one window only.
• Debt load. Personal debts count, and a strong average does not erase them.

For more on the declining side of this question, see Lendmire’s piece 12 vs 24 Month Bank Statements When Income Declined. For the choice between products when deposits jumped or dropped, see its piece Bank Statement Loan vs DSCR When Your Deposits Jumped or Dropped This Year.

Key Terms Defined

Lookback window: The number of months of statements used to average deposits, commonly 12 or 24.

Eligible deposits: Deposits that count toward income after transfers, loan proceeds and similar items are removed.

Expense factor: The share of gross business deposits assumed to go to operating costs.

Qualifying income: The figure left after the expense factor, averaged over the window.

Asset depletion: A qualification method that uses liquid assets in place of deposits, up to about 80% LTV on a primary residence on select programs. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.

A Balanced Verdict

Run both averages. If they land close together, the window matters little, and the cleaner paper trail wins. If they split, let the trend decide. Rising income favors 12 months. Seasonal or lumpy income favors 24. A recent drop is a problem under either, and a documented explanation matters more than the window.

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.

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. Consumer mortgage licensing for this lane covers 16 states, and every file is a broker placement subject to lender guidelines, not a commitment to lend.

About Lendmire

As a DSCR and non-QM mortgage broker, Lendmire — NMLS# 2371349 — connects investors with wholesale lending channels across 41 markets, including Washington, D.C. The property’s rental income, not the borrower’s tax returns, is central to lender review, which works for self-employed operators and portfolios beyond four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

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

2. Kubera: Bank Statement Loan Explainer

3. Scotsman Guide: Don’t Drown in the Sea of Lending Sameness

4. BiggerPockets forum reply

5. CFPB ATR/QM Small Entity Compliance Guide

6. Federal Register: Ability-to-Repay and Qualified Mortgage Standards