All About The Bank Statement Mortgage Refinance & Cash-Out Loan
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.
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