Bank Statement Second Mortgages

for Self Employed Borrowers & Real Estate Investors

If you’re self employed or a real estate investor, you may have strong cash flow—but traditional underwriting doesn’t always reflect how you earn. A bank statement loan second mortgage (also called a bank statement second mortgage or NonQM second mortgage) can help you access home equity without refinancing your existing first mortgage.

This is a fixed term, lump sum home equity loan (second lien) that may allow qualification using 12–24 months of bank statements (guidelines vary by lender). Full documentation options may also be available for borrowers who qualify using W2s and tax returns.

 

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Why a Bank Statement Second Mortgage Can Be a Smart Move

A second mortgage can be a powerful strategy when you want cashout without refinancing your first mortgage—especially if your first mortgage has a favorable interest rate.

Key Advantages

  • Keep your first mortgage intact (avoid resetting your rate and term)
  • Lump sum proceeds you can use for a wide range of goals
  • Fixed terms for predictable payoff timelines
  • Typically, no prepayment penalty (owner occupied properties)
  • Alternative income documentation for self employed borrowers (bank statements)

Bottom line: A bank statement second mortgage can help you unlock equity while avoiding the “refinance trap” of giving up your low first mortgage.

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Who These NonQM Second Mortgages Are Built For

 

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This type of second mortgage is commonly used by:

  • Self employed borrowers who write off income on tax returns
  • Business owners, entrepreneurs, and freelancers
  • 1099 and commission-based earners
  • Real estate investors with multiple properties or variable income
  • Homeowners who want cash for improvements, reserves, or debt consolidation (when appropriate)

How Qualification Works with Bank Statements

A bank statement second mortgage focuses on cashflow deposits instead of only W2s or tax returns.

Depending on the lender and your scenario, income may be evaluated using:

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12–24 months of bank statements (personal, business, or both)

 

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A program-based expense factor (used to estimate usable income)

 

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Common-sense analysis that supports variable income patterns

 

If you qualify better with traditional documentation, full doc second mortgage options may also be available.

What You Can Use the Funds For

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Because this is a lump sum second mortgage, borrowers often use proceeds for:

  • Home improvements or renovations
  • Business liquidity or reserves
  • Debt consolidation
  • Real estate investment expenses
  • Emergency reserves / cash management

 

Bank Statement Loan Second Mortgage Program Highlights

Below are common program characteristics (final terms vary by lender, credit, equity, and property):

  • Loan amounts: typically, $150,000 to $750,000
  • Fixed terms: 30-year, 20-year, 15-year, 10-year (program dependent)
  • Property types: owner-occupied, second homes, investment properties

 

  • Credit score: typically, 680+ minimum (scenario dependent)
  • Max combined loan-to-value (CLTV): up to 90% (program dependent)
  • Debt-to-income (DTI): up to 50% (program dependent)

 

Important note about rates and costs


Second mortgages are priced based on the full risk picture (credit, CLTV, income profile, occupancy, etc.). Instead of chasing a “headline rate,” the best strategy is to compare total loan cost + monthly payment impact for your specific scenario.

 

Second Mortgage vs Cash-Out Refinance

A cash-out refinance replaces your first mortgage. A second mortgage lets you access equity while keeping your existing first mortgage in place—often a cleaner strategy when you don’t want to disturb a favorable first mortgage rate.

Why Choose
HomeLife Mortgage

At HomeLife Mortgage, we focus on solutions for borrowers whose income doesn’t fit neatly into standard boxes. That means:

  • Clear guidance on what documents matter most
  • Clean, lender ready file presentation
  • Helping you compare options for rates, payment, cost, and approval strength

Fast next step: We’ll review your goals, estimate your combined loan-to-value, and confirm whether bank statements or full doc is the best path.

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Download our free eBook below to learn the ins and outs of bank statement loans and everything you need to know to apply and qualify for your loan in Florida.

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