Underwriters do not rebuild your tax return. They exclude non-revenue deposits, then apply a program expense factor — or a CPA-supported ratio — so business deposits become realistic net income for DTI.
What gets removed before the average, and what the expense factor assumes afterward.
Common non-revenue credits Indiana underwriters remove from bank statement averages.
Transfers
Own-account moves
Personal ↔ business recycling
Financing
Loan / HELOC proceeds
Borrowed cash is not income
One-time
Gifts & capital in
Non-operating infusions
Refunds
Tax / merchant returns
Credits that reverse outflows
NSF reversals
Returned items
Do not inflate deposits
Default factor
~50% common
Exact % varies by investor
Expense factors and exclusion lists vary by investor. We confirm the matched program before you apply.
Ryan & Steve scrub statements for exclusions first, then compare personal vs. business paths — and whether a CPA letter beats the default expense factor.
Ownership percentage multiplies business income. Multi-owner LLCs need clear docs so you are not under-credited for your share.
The cleaner the deposit trail, the less underwriting argues about what “counts” — which speeds pre-approval for self-employed Indiana borrowers.
Income-calc prep list
Related bank statement guides and Non-QM resources from Ryan & Steve.
Step-by-step deposit average and factor math.
Expense factors, ownership docs, and multi-owner rules.
When a CPA expense letter supports a better factor.
Full program hub with guidelines and Get Pre-Approved CTAs.
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On business-statement programs, lenders typically apply an expense factor (often around 50%) to eligible deposits — not a line-by-line tax Schedule C. Transfers, loan proceeds, and non-revenue credits are also removed before averaging. Personal-statement paths often use a deposit percentage instead of a large expense haircut.
No. Bank statement expense factors are underwriting assumptions for cash-flow income. Your tax depreciation and Schedule C deductions are why conventional AGI can look weak — deposit qualifying is designed to look past that.
Yes on many programs. A CPA expense letter or P&L can support a lower expense ratio when your real margins are stronger than the investor’s default factor — increasing usable qualifying income.
Transfers between your own accounts, refunds, loan proceeds, large one-time gifts or capital contributions, and other non-business credits are usually stripped so income reflects operating cash flow.
Ryan & Steve will scrub deposits, apply the right factor, and tell you if a CPA letter unlocks more income — before you apply.
Ryan Minick and Steve DeLon — Branch Managers & Senior Loan Officers at Luminate Bank. Based in Kokomo, Indiana. Lending nationwide since 2005.
Contact
Ryan Minick NMLS# 203249
Steve DeLon NMLS# 202876
Luminate Bank NMLS# 1281698
Kokomo's Mortgage Team. Lending Nationwide.
1221 Appletree Lane, Kokomo, IN 46902
Luminate Bank NMLS 1281698 Bank Headquarters 2523 S. Wayzata Blvd., Suite 100 Minneapolis, MN 55405 (952) 939-7200. This is not an offer to enter into an agreement. Information provided is outlining the minimum down payment requirements as allowed by specific loan program and product guidelines and any information, rates and programs are subject to change without prior notice and may not be available in all states. All loans are subject to credit and property approval. Luminate Bank is not affiliated with any government agency. All rights reserved.
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