My Perfect Mortgage
Bank Statement Mortgage Loan Refinance Explained
5 minute read
September 8, 2023

Being self-employed comes with great benefits, but easy mortgage approval isn’t one of them.

Enter bank statement loans. No tax returns, W2s, or paystubs required. Qualify based on 12-24 months’ bank deposits (sometimes less).

Bank statement loans are often used to buy a home, but you can also use them to refinance. Here’s how.

Get started on your bank statement mortgage refinance.

Bank statement mortgage standard rate/term refinance

These innovative financial instruments allow self-employed borrowers to refinance their existing mortgages without the hassle of extensive paperwork. Here’s how to use them for a standard rate/term (no-cash-out) refinance.

1. Get a lower rate: A bank statement mortgage refinance can help you secure a lower interest rate, potentially saving thousands of dollars over the life of your loan. Maybe you first purchased the home with a hard money loan with a high rate of 12% or higher. Bank statement loan rates are in the low 8% range as of this writing.

2. Remove mortgage insurance: By refinancing, you may also have the opportunity to eliminate costly private mortgage insurance (PMI). Perhaps you purchased a home with a conventional loan at 10% down. You have since gone self-employed, but your property value has risen enough to eliminate PMI.

3. Pay off a short-term loan: If you purchased a home with a hard money loan, the expiration date might be looming. Replace it with a long-term fixed bank statement loan.

Bank statement cash-out refinance

A bank statement mortgage can also be employed to access the equity in your home. This is called a cash-out refinance, which is where you take out a larger loan and receive cash back at closing.

The funds you acquire from a cash-out refinance can be put to versatile uses, such as:

1. Investing in your business: Infuse capital into your business to fuel growth, expand operations, or seize new opportunities.

2. Home improvements: Enhance your living space or increase your home's market value through renovations.

3. Purchase another property: Invest in additional real estate, diversifying your portfolio and income streams.

4. Debt consolidation: Combine high-interest debts into one more manageable payment with a lower interest rate.

5. High-yield investments: Allocate the cash into investments that have the potential for higher returns.

6. Pay off multiple liens: You may have a 2nd or even 3rd mortgage on your property. Pay them all off with a cash-out bank statement mortgage.

Exercise Caution: However, not all uses of cash-out funds are advisable. Avoid spending on items with no return on investment, such as lavish vacations, paying off lower-interest debt, or adding amenities to your home that won't increase its value.

See if you’re eligible for a bank statement mortgage cash-out refinance.

Bank statement mortgage refinance requirements

To qualify for a bank statement mortgage refinance, you typically need to meet the following requirements:

1. Self-employment: Be self-employed for at least two years, although some lenders may make exceptions for one year of self-employment if in the same field previously.

2. Bank statements: Provide 12-24 months of business or personal bank statements, with lenders considering approximately 50% of bank deposits as qualification income to account for business expenses.

3. Credit score: Maintain a credit score of at least 600-620, depending on the lender's requirements.

4. Bankruptcy: Wait at least two years after a bankruptcy before applying.

5. Loan-to-value Ratio: Expect a maximum loan-to-value ratio of 80-85%, depending on the lender's policies.

6. Property types: Bank statement mortgage refinances are available for primary residences, second homes, and investment properties.

7. Loan amount: Loan amounts can range from $3-5 million, catering to various financial needs.

8. Debt-to-income ratio: Maintain a debt-to-income ratio below the lender's maximum limit, usually around 50% (meaning 50% of your qualification income can go toward housing and other debt payments).

9. Reserves: Have three months of full housing payments in reserves after closing, excluding cash-out funds.

The Process

The process of securing a bank statement mortgage refinance involves several key steps:

1. Application: Begin by applying with a lender who offers bank statement mortgage products.

2. Documentation: Provide the necessary documents, including bank statements, to support your income.

3. Appraisal: The lender may order an appraisal of your property to determine its current value.

4. Underwriting: The lender evaluates your application and supporting documents to determine if you meet their criteria.

5. Final loan document signing: Once approved, you'll sign the final loan documents.

6. Funding: After the documents are signed, the funds are disbursed, and your existing mortgage is paid off.


Fortunately, there are plenty of lenders in today’s market that let you refinance using a bank statement loan.

Here are five popular bank statement loan refinance lenders to consider:

1. Griffin Funding: Offers flexible terms and a straightforward application process.

2. Northstar Funding: Use 100% of personal bank statement deposits to qualify.

3. Truss Financial: Offers bank statement loans as well as No Doc, stated income, and other Non-QM products.

4. Valor Lending: Known for fast approval and funding times.

Connect with a reputable bank statement loan lender here.

Who is Eligible for a Bank Statement Mortgage Refinance?

Bank statement mortgage refinances cater to a wide range of self-employed professions, including:

  • Doctors
  • Lawyers
  • Small business owners
  • Gig workers
  • 1099 workers
  • Rideshare drivers
  • Freelancers

Forget about tax returns for good

If you're ready to seize this opportunity, reach out to a bank statement loan lender today.

In today’s market, there’s no longer a need to wait to file two years of pristine tax returns to qualify for a mortgage. Use a bank statement loan instead.

Start your bank statement mortgage refinance loan here.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.