How to Use a Bank Statement Loan to Refinance Your Home

Refinancing your home can unlock better interest rates, lower monthly payments, or cash-out equity for future investments. But for self-employed homeowners, gig workers, or those with complex income streams, traditional refinancing options often present frustrating hurdles. That’s where bank statement loans come in—offering a smarter, more flexible alternative.

Whether you’re an investor looking to reduce costs or a freelancer aiming to tap into equity, this guide walks you through how to use a bank statement loan to refinance your home—no tax returns or W-2s required.

What Is a Bank Statement Loan?

A bank statement loan is a type of non-QM (non-qualified mortgage) that allows borrowers to qualify for a mortgage using their bank deposit history instead of traditional income documentation. Lenders analyze 12 to 24 months of personal or business bank statements to determine your ability to repay.

Best For:

• Self-employed professionals
• Business owners
• Freelancers and gig workers
• Real estate investors with variable income

Why Use a Bank Statement Loan for Refinancing?

Bank statement loans can be an excellent fit when:

• You’ve been declined by traditional lenders due to inconsistent or “write-off-heavy” income.
• You want to refinance at a better rate without jumping through endless paperwork hoops.
• You’re looking to cash out equity for real estate investing or business growth.

Key Benefits:

• No tax returns required
• No W-2s or pay stubs needed
• Accepts complex or fluctuating income
• Can be used for cash-out refinance
• Often closes faster than traditional loans

How the Refinancing Process Works with Bank Statement Loans

1. Assess Your Goals

Are you aiming for lower monthly payments, a better interest rate, or tapping equity through a cash-out refinance? Your goals shape your loan structure.

2. Gather Your Bank Statements

Most lenders require 12–24 months of business or personal bank statements. They’ll average your deposits to estimate income.

3. Work With a Lender That Understands Investors

Choose a lender experienced with non-QM products. For real estate investors, look for those who also offer DSCR loans, HELOCs, or cash-out options.

4. Get a Loan Estimate

The lender evaluates your credit score, loan-to-value (LTV) ratio, and deposit history. Most require:

• Minimum credit score: ~660
• Max LTV: 80%
• Reserves: Often 6–12 months of payments

5. Close Your Refinance

Once approved, you’ll close like any other refinance—with the benefit of skipping the headaches of income verification.

Real-World Example

Meet Lisa: A freelance graphic designer with strong income but major tax write-offs. Denied by two traditional lenders, she used 24 months of business bank statements to qualify for a bank statement refi. She refinanced her home at a 7.2% fixed rate, cut her payment by $370/month, and pulled $35K cash-out for a down payment on a duplex.

Why Investors Love This Strategy

If you’re a real estate investor, a bank statement refi offers two huge advantages:

1. Cash-Out Potential: Pull equity to fund your next deal—similar to a DSCR cash-out refinance.
2. Simplified Approval: No need to explain every K-1, 1099, or LLC disbursement.

Ready to explore your options? Submit your loan scenario now to get matched with a lender.

When a Bank Statement Loan Makes Sense

Alternatives to Consider

While bank statement loans are powerful, compare them with these refinancing strategies:

• HELOCs for Real Estate Investment
• Cash-Out Refinance with DSCR Loans
• Asset Depletion Mortgages

Each has unique advantages depending on your profile and investment goals.

FAQs About Bank Statement Loan Refinancing

Get Matched with a Lender Who Specializes in Self-Employed Borrowers

Self-employed doesn’t mean unqualified. If you’ve been turned down by traditional lenders, it’s time to explore better options.

Click here to get matched with a lender who understands your business—and your goals.

Read Next

• Bank Statement Loans 101: How They Work
• Bank Statement vs. DSCR Loans: What’s Best for You?
• Asset Depletion vs. Bank Statement Loans

Want to talk through your refinancing options? Submit your loan scenario here and let us help you unlock the best path forward.