BANK STATEMENT RATE & TERM REFINANCE
Essential Elements

A Bank Statement Rate and Term Refinance Loan is a refinancing option designed for self-employed individuals, business owners, and others with non-traditional income sources who may not be able to provide conventional income documentation, such as W-2s or tax returns. Instead, borrowers qualify for this refinance based on their bank statements, which show consistent deposits and cash flow. This loan focuses on changing the rate and/or term of an existing mortgage without drawing out extra cash, making it an attractive option for borrowers looking to lower their interest rate, reduce monthly payments, or adjust the loan term.

Bank Statement-Based Qualification
Instead of providing traditional proof of income, borrowers qualify by submitting 12 to 24 months of bank statements. Lenders analyze deposits to determine income consistency and reliability.

Ideal for Self-Employed or Business Owners
This type of loan is particularly helpful for self-employed borrowers who may not have consistent W-2s or tax returns reflecting their actual income due to write-offs or business expenses.

Rate and Term Adjustment
Many borrowers pursue rate and term refinancing to secure a lower interest rate, which can reduce monthly payments and lower overall loan costs.

Term Adjustment
Borrowers can also change the length of their loan term, which can further reduce monthly payments by extending the term or help pay off the loan faster by shortening it.

No Cash-Out Component
Unlike a cash-out refinance, this option only allows for a change in the rate or term, without drawing out additional equity. This can result in a more favorable interest rate compared to a cash-out refinance.

Alternative to Tax Returns and Pay Stubs
Bank statement refinance loans are designed for those who may not have traditional documentation. Lenders focus on cash flow shown in bank statements, making it easier for self-employed borrowers to qualify.

Simplified Approval Process
Bank statement loans generally require less documentation than conventional loans, streamlining the refinancing process.

Competitive Rates
While the interest rates for bank statement loans may be slightly higher than standard refinancing options, they remain competitive and offer a valuable option for non-traditional income earners.

Flexible Loan Terms
Terms can range from 15 to 30 years, allowing borrowers to choose a repayment schedule that aligns with their financial goals.

Improved Cash Flow
A lower interest rate or extended loan term can reduce monthly payments, allowing for better cash flow management, which is particularly helpful for those with fluctuating income.

Is a Bank Statement Rate and Term Refinance Loan Right for You?
A bank statement rate and term refinance loan can be a practical solution for self-employed individuals or those with complex incomes who want to adjust their mortgage without tapping into home equity. It’s particularly beneficial for those with steady bank deposits but who may struggle with traditional income documentation. Before proceeding, potential borrowers should evaluate their deposit history and ensure they can provide the necessary bank statements to qualify.

This refinancing option helps self-employed borrowers achieve lower rates and adjusted terms, improving cash flow and making mortgage payments more manageable while leveraging their unique income structure.