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Bank Statement Second Mortgage

Alternative income qualifying is like a cash-out refinance the second mortgage, but you keep the low rate from your 1st mortgage.

What is a second Mortgage?


The Bank Statement Stand-Alone Second is a 2nd mortgage that allows you to qualify without providing two years of Tax Returns or 1099s. Technically, it is a non-QM (non-qualified mortgage) program that replaces traditional tax-return income verification methods with bank statements. You can substitute tax returns and W-2 forms for your bank statements to calculate your income. At heart, it is an Alternative to Traditional Income Verification.

Bank statement loans are crucial tools for individuals who need to meet the traditional income verification mold. Whether you are a self-employed business owner or facing unique income challenges, these loans offer a way forward.

The Bank Statement 2nd Mortgage program offers various financial solutions for homeowners and property investors. Whether you’re looking to tap into your home’s equity, consolidate debt, or make a strategic real estate move, this program provides the flexibility and options you need to achieve your financial goals.

How Does A Second Mortgage Work? 

This mortgage helps Self-Employed individuals who generate enough income to repay a loan but don’t show it on their tax returns. We understand this is common for many business owners who choose not to withdraw profits from their business but instead re-invest their earnings into their companies. Because of this common tactic, these individuals may be capable of repaying a Second Mortgage. However, still, they cannot qualify “on paper” for the loan. This program allows these homeowners to provide bank statements instead of Tax returns or 1099’s. To approve you, we calculate the cash flow of your bank statements and use this as income.

What About My Very Low Rate on My First Mortgage? 

We understand that many existing loans are at historically low rates. With a new second mortgage, you do not have to refinance that first mortgage loan to access home equity. You will keep your first mortgage as-is and originate the new 2nd mortgage separately.

What is a Second Mortgage? 

A Second Mortgage is a loan that is collateralized by your home, just like a first mortgage. It is distinguished from a first mortgage because it sits in “second” place on your title, behind your first mortgage. Because of this distinction, Second Mortgages can have unique characteristics from First Mortgages. A bank statement mortgage loan is an excellent example of this.

How are Second Mortgages different from First Mortgages? 

Government-sponsored enterprises (GSE) like Fannie Mae, Freddie Mac, FHA, and VA do not guarantee Second Mortgages. The individual bank statement mortgage lenders or investors who offer second mortgages write their guidelines. Because of this, many second mortgage programs have slight differences. These differences can benefit borrowers because qualifying is less “one size fits all” than for first mortgages.

How is a Second Mortgage different from a HELOC? 

Second Mortgages have fixed-rate interest rates. HELOCs have variable (adjustable) rates that typically are due after a set amount of time on a single balloon payment. For example, a HELOC might have an interest-only payment each month, adjust as rates adjust, and be payable in full after ten years in a lump sum.

How Are Bank Statement Loans Calculated? 

Guidelines will vary from lender to lender, but mostly, your bank statements tell the story. Lenders calculate your income based on 12 or 24 months of bank statements. The key is to demonstrate your ability to repay the loan. Seasonal income or unique deposit patterns are also considered.

What is the Maximum loan amount? 

Whether your financial aspirations are modest or grand, this program offers loans ranging from $200,000 to $1,000,000. The maximum the combined 1st and 2nd loan amount cannot exceed $5,000,000.

What if I have a Rental Property? 

The Bank Statement 2nd Mortgage program caters to diverse needs and property types, including primary residences, second homes, and 1-4 unit investment properties.

What is the Term?

Choose from various terms to match your financial ambitions, whether a 30-year fixed, 20-year fixed, 15-year fixed, 10-year fixed, or an interest-only option for the first ten years.

What Credit Score is Required?

As of 11/07/2023, the minimum FICO score requirement is 680 for the primary earner.

How much income do I need? 

As of 11/07/2023, this program offers bank statement documentation with up to a Debt-to-Income ratio of up to 50%.

Is there a limit to how I use the Money? 

Utilize this program for various transactions, from cash-out or debt consolidation to purchasing properties with specific requirements, delayed financing, and more.

What is the interest rate for the Bank Statement 2nd Mortgage program?

You might be surprised that second mortgage rates on these programs are typically only a half point or higher than non-bank statement loans. Reach out to us for a quote.

Is the Bank Statement 2nd Mortgage program available in all states?

We are licensed in Colorado, Arizona, Texas, Oregon, and Michigan

How to Qualify for a Bank Statement Loan? 

Here’s your roadmap to securing a bank statement mortgage:

  1. Meet with a Loan Officer: Schedule a chat with one of our friendly Loan Officers at Locus Mortgage. We’ll guide you through your mortgage options.
  2. Gather Supporting Documentation: Collect the necessary paperwork for your mortgage pre-approval, including bank statements, tax returns, identification, proof of address, and requested documents.
  3. Complete and Submit the Pre-Approval Application: Easily fill out and submit the pre-approval application using our secure application., or we can talk on the phone. Conveniently upload your documents from your mobile device or desktop.
  4. Review and Determine Loan Amount: Our expert Loan Officers will assess your financial situation and determine your loan amount.
  5. Submit to Underwriting and Receive Initial Approval: Underwriting will review your documentation and issue an approval, usually within 24-48 hours.
  6. Appraisal: Sometimes, a standard appraisal is required, but often a limited “desk review” appraisal is sufficient.
  7. Clear Conditions: We send any additional items back to underwriting for final approval.
  8. Cleared to Close: Underwriting clears the file for closing; congratulations, we are ready for closing!
  9. Closing: You sign the final documents with a notary present.

Funding: Funds are from the lender, and the process is complete.

Call Us

Need help?

Our team is here to answer your questions.

Whether you’re not sure how to get started or want help understanding your options, we’re happy to assist.

  • Call us at 303-444-5251
  • Email info@locusmortgage.com
  • Or just click the green “Get a Quote” button to begin — we’ll follow up.

We believe in pressure-free guidance, not sales calls. Reach out anytime.

Rate Alert

Want to track rates that match your exact scenario?

Click “Personalize My Rate” to receive bi-weekly updates based on the information you’ve entered.

  • You’ll see updated rates for your specific loan size, credit score, and property type.
  • No spam — just clean rate updates every other week.
  • You can unsubscribe at any time with one click.

This is the easiest way to watch the market and lock in when the timing is right — without re-entering your info each time.

What is this page?

This is the same live rate sheet we use when you call in for a quote.

Rates are shown from lowest to highest. Here’s how to understand the options:

  • Lower rates typically come with a discount fee (or “points”).
  • Higher rates may include a lender credit to offset your closing costs.
  • We display multiple loan terms — 15yr, 20yr, and 30yr — so you can compare.

This page gives you full transparency. You can see exactly what you qualify for and how your choices affect the rate and costs.

Where do I start?

To get an accurate quote, begin at the top of the form.

Enter all the requested information as accurately as possible:

  1. Choose Purchase or Refinance.
  2. Fill in your ZIP code, purchase price or home value, down payment or mortgage balance, and credit score.
  3. Select your property type and how it will be used.

These inputs directly affect your quoted rate. The more accurate your entries, the more personalized and reliable your quote will be.

Fee Breakdown Guide

This quote includes lender fees only.

To see an estimate of all fees, including third-party costs:

  1. Click the blue Fees link.
  2. In the pop-up, click Details.
  3. Then select Closing Cost PDF.

This will show estimated title fees, appraisal, taxes, and insurance. Since those vary by property and location, we only display lender fees here — the part we can quote precisely.