For many self-employed borrowers and investors, traditional lenders make it difficult to access home equity because tax returns often understate true income. A Bank Statement HELOC (Home Equity Line of Credit) changes that. Instead of requiring W-2s or tax returns, you can qualify using your bank deposits, giving you the flexibility to unlock equity in a way that reflects your real cash flow.
This option is ideal if you want ongoing access to funds for business expansion, real estate investments, debt consolidation, or personal expenses — all without the rigid paperwork of traditional loans.
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Both options let you tap into your home’s equity, but they work differently. Here’s how to decide which is right for you:
Feature | Bank Statement HELOC | Cash-Out Refinance |
|---|---|---|
How You Access Funds | Revolving line of credit – borrow as needed | Lump sum at closing |
Payments | Interest only on what you draw | Full principal & interest on new loan amount |
Flexibility | Ongoing access, can reuse as you repay | One-time cash out |
Qualification | Bank statements instead of tax returns | Bank statements instead of tax returns |
Best For | Ongoing expenses, business growth, or future opportunities | Major one-time needs like debt payoff or large purchases |
Bank Statement HELOCs are designed for self employed borrowers and real estate investors who need a flexible way to access home equity. Here are some of the most common questions and answers to help you understand how this option works.
A Bank Statement HELOC (Home Equity Line of Credit) allows borrowers to qualify using 12 to 24 months of personal or business bank statements instead of tax returns or W-2s. It’s a flexible way for self employed borrowers and investors to unlock equity based on real cash flow.
This program is ideal for self employed homeowners, business owners, and real estate investors who want ongoing access to equity. It’s also a good fit for borrowers who prefer flexibility over a one-time lump sum, and for those whose tax returns don’t reflect their true income.
You’ll need to provide 12 to 24 months of bank statements showing steady deposits. Lenders will review your cash flow, determine available equity in your property, and approve a line of credit in second lien position. Once set up, you can draw funds as needed and only pay interest on what you use.
A Bank Statement HELOC gives you a revolving line of credit, so you can draw funds as needed and reuse the line as you repay. A Cash-Out Refinance provides a single lump sum with a fixed repayment schedule. SEI Mortgage helps you choose the option that fits your financial goals best.
Borrowers often use Bank Statement HELOC funds for business expansion, real estate investments, debt consolidation, home improvements, or personal expenses. Since interest is only charged on the funds you draw, it’s a cost-effective way to access equity as opportunities arise.
