The Quick Read: The borrowing owner’s deposits carry the income side, the loan-to-value cap carries the equity side, and every owner on title usually has to sign the new lien. Twelve months of statements typically document income. A co-owner who will not sign usually stops the file.
- Primary residence: a cash-out typically tops out at 80% loan-to-value (LTV) with a fixed expense ratio, and at 75% if an accountant prepares the expense ratio.
- Second home: a cash-out runs up to 75% LTV, depending on loan size and credit.
- Investment property: a cash-out tops out around 75% LTV.
- Size and reserves: loan amounts typically run from $125,000 to $3,500,000, with reserves commonly around six months of the housing payment.
- Co-owners: whether a non-borrowing owner must also sign the note depends on the program, but the lien signature is the rule on most files.
All figures reflect select lenders in Lendmire’s wholesale network, are subject to lender guidelines, and are not a commitment to lend.
Co-owned homes are common. Spouses buy together, siblings inherit together, and friends pool money on a duplex. Then one owner runs a business, shows low taxable income after write-offs, and wants to pull cash out. This guide walks through how that file works from start to finish.
Key Terms Defined
Bank statement loan: A mortgage that is reviewed on documented income under the applicable program, subject to lender guidelines. It uses deposits in your bank accounts in place of tax-return income.
Cash-out refinance: A new mortgage that pays off the old one and hands you the extra equity as cash.
Co-borrower: An owner who is on the note, meaning the promise to repay. Their credit, debts, and income are part of the file.
Non-borrowing signer: An owner who stays on title and signs the lien but is not on the note.
Tenants in common: A form of co-ownership where each owner holds a share, and the shares can be unequal.
Expense factor: The percentage a lender subtracts from business deposits to estimate what you actually keep. The lender sets it, not you.
Seasoning: The waiting period a lender wants between buying or retitling a property and refinancing it. It varies by program.
Can You Do a Bank Statement Cash-Out Refinance on a Co-Owned Home?
Yes, in most cases, but co-ownership adds a consent step. Title is the deed. The note is the promise to repay. A lender looks at both, and the two lists of names do not have to match.
Owners on title usually sign the new lien so the lender can hold a first position on the whole property. A consumer-finance explainer on tenants-in-common mortgages from NerdWallet’s Canadian site says every party on title signs the mortgage. Title and lien rules vary by place, so treat that as the general principle only. Hemlane adds that owners typically sign the loan documents when a tenants-in-common property is financed, and that co-owners are generally equally liable for the debt.
Here is how the roles usually split:
| Role | Signs the lien | Income counts | Liable for the debt |
|---|---|---|---|
| Co-borrower on title | Yes | Yes | Yes |
| Non-borrowing owner on title | Usually yes | No | Depends on program |
| Owner not on title | No | Only if a program allows | Depends on program |
The middle row is where files get tangled. A non-borrowing owner adds nothing to the income side, yet most programs still want that signature on the lien. Confirm early which roles the program allows.
How Does Qualification Work With Shared Ownership?
Two limits apply to every file: income and equity. Whichever is tighter sets your loan. A strong deposit history cannot lift a loan past the LTV cap, and big equity cannot rescue weak income.
Income. If one owner is self-employed, only that owner’s statements are analyzed. If both owners borrow, the lender underwrites the group. That means pooled credit, pooled debts, and pooled documented income. Adding a second borrower helps only when that person’s income is real and their debts do not eat the gain. A co-borrower with heavy debt can make the file worse.
Equity. Across the wholesale network Lendmire works with, the ceilings depend on how you occupy the home:
- A primary residence cash-out runs up to 80% LTV with a fixed expense ratio. With an accountant-prepared ratio the ceiling drops to 75%. The accountant route is the lower ceiling, so it is not a way to borrow more.
- A second home cash-out runs up to 75% LTV, set by loan size and credit.
- An investment property cash-out tops out around 75% LTV.
- Some programs qualify primary-residence borrowers on liquid assets instead of deposits. That asset-depletion route runs to about 80% LTV on a primary residence. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
You may see a 90% figure online for primary residences. That applies to purchases and no-cash-out refinances through select lenders. It does not apply to a cash-out.
Credit and reserves. Credit tiers move the leverage. Stronger files earn the top of each range. Loan sizes run roughly $125,000 to $3,500,000.
How Do Underwriters Read the Bank Statements?
They treat the statements as evidence, not as a story. The lender averages eligible deposits over the period, applies an expense factor to business accounts, and ends up with a monthly qualifying income. Every deposit has to earn its place.
The federal ability-to-repay rule expects lenders to verify income with third-party records. The CFPB’s small-entity compliance guide says a creditor generally cannot rely on what consumers say about their income. That is why a bank statement loan is not a stated-income loan. The lender reads the deposits and must be able to show they are income.
Underwriters generally keep revenue deposits. They set aside transfers between your own accounts, loan proceeds, refunds, and owner cash injections. Sale proceeds from real estate and moved money usually come out as well.
The 43% debt-to-income ceiling is a qualified-mortgage criterion, according to CFPB Appendix Q. A non-QM bank statement loan is therefore judged against each lender’s own debt limits instead. Those limits vary, which is one reason placing a file with the right lender matters.
Three details trip up co-owners in particular:
- Single account. Most programs want the average to come from one account. Some allow several. Ask before you merge accounts.
- Shared business accounts. If you and your co-owner are also business partners, the lender will usually apply your ownership share to the result. Expect questions about who owns what.
- Declining deposits. A falling trend is a red flag. A 24-month window can smooth seasonal swings, while a 12-month window can look better when income is growing.
Which Co-Owner Scenario Looks Like Yours?
Different relationships create different hurdles. The table shows the usual pattern, not a rule.
| Scenario | Who borrows | Who signs | Main hurdle |
|---|---|---|---|
| Spouses | One or both | Both | Whose income is stronger |
| Unmarried partners | One or both | Both | Clean title and shared debts |
| Siblings or heirs | Often one | All on title | Getting everyone to agree |
| Friends or investors | Varies | All on title | Unequal shares, buyout terms |
| Buyout of a co-owner | The keeper | Exiting owner, then off title | Sourcing the payout |
| LLC-held title | Varies | Entity signers | Many programs will not lend on LLC title |
Subject to program terms, an LLC on title often changes the file or ends it. If the home sits in an LLC, raise that before anything else.
Siblings and heirs are the slowest to line up in practice, because one reluctant person can hold everyone else. Friends and investors face the opposite problem. Their shares are often unequal, so the payout math has to be settled in writing before the application starts.
What Documents Should You Gather?
Gather three groups of paperwork. Missing items are a common reason files stall.
Per borrower
- Twelve consecutive months of personal or business bank statements, with every page and every transaction visible.
- A written explanation for any large or unusual deposit.
- Credit authorization, ID, and a list of monthly debts.
- Business proof, such as a license or accountant letter, where the program asks for it.
Property and title
- Current mortgage statement and the vesting on the deed.
- Homeowners insurance declaration page.
- Occupancy facts: primary residence, second home, or rental.
- A lease or rent history if the property is a rental.
Co-owner
- Government ID for every owner on title.
- Written confirmation of who is borrowing and who is only signing.
- Any buyout or partnership agreement, signed by all parties.
What Does the Application Look Like Step by Step?
Follow this order. Skipping ahead is how a file ends up back at the start.
1. Get agreement first. Before any application, confirm each owner will sign and settle any payout terms. Co-owner action: a conversation, ideally in writing.
2. Pick the borrower. Decide whose income and credit should carry the loan. Co-owner action: agree on who borrows and who only signs.
3. Pre-qualify. A broker reviews your deposits and credit against several programs. Co-owner action: supply ID and credit authorization if they are a co-borrower.
4. Document the file. Submit statements, title facts, and explanations for deposits. Co-owner action: provide anything tied to their role.
5. Order the valuation. The appraisal sets your equity. Rentals typically include a rent analysis. Co-owner action: allow access.
6. Clear title and underwriting. The title company confirms how ownership is vested. The lender reviews income, credit, and conditions. Co-owner action: fix any title issue they own.
7. Sign and fund. Every owner on title signs the lien. A non-borrowing owner stays off the note. Co-owner action: sign the lien documents.
The disclosure regime depends on occupancy. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage, and TRID disclosure rules apply. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is business-purpose and exempt from TRID. Know which one your property is before you compare quotes.
What Does the Math Look Like?
Run it in percentages. Assume a co-owned primary residence, a modeled scenario and not a quote.
- Home value: 100% of appraised value.
- Maximum LTV on a primary-residence cash-out with a fixed expense ratio: 80%.
- Existing mortgage payoff: 55% of value (modeled assumption).
- Partner payout, if the program allows it in the transaction: 10% of value (modeled assumption).
- Closing costs and fees: 2% of value (modeled assumption).
Start with 80% and subtract the 55% payoff. That leaves 25% of value. Subtract the 10% payout and 15% remains. Subtract 2% for costs and you hold about 13% of the home’s value in cash, before any reserves requirement.
Now switch to the accountant-prepared route, where the cap is 75%. Start with 75% and subtract the same 55%, leaving 20%. Subtract 10% and 2%, and about 8% remains. Same house, same debts, and a thinner result. The ceiling dropped five points while the costs stayed put.
That is the equity limit at work. Income is the second test. The borrower’s qualifying income must still cover the new payment alongside other debts, and the lender’s debt limits decide how much of that income can go toward housing. If either test fails, you either borrow less or restructure.
Treatment of a co-owner payout varies by program. Some lenders count it as cash-out. Ask before you build your plan around it.
What If a Co-Owner Won’t Sign?
You cannot force a signature, and a refinance cannot go ahead without one on most files. Work through these paths in order:
| Path | When it fits |
|---|---|
| Buy the co-owner out | You can fund the payout and keep the home |
| Finance a different property | The home is not the only asset you can tap |
| Use a different product | A second loan or equity line may need different consent |
| Legal routes such as partition | Negotiation has failed and the home must be divided or sold |
| Wait | Circumstances, such as an estate or divorce, are still settling |
Buyout first is usually the cleanest answer. Pulling cash from a co-owned asset needs buy-in from every title holder. Plan the order: agreement, then title, then application.
Move large deposits with care. Money that comes from a co-owner, or money you contributed toward a buyout, can show up as an unusual deposit. Document the source, and do not mix it into the income history you are asking the lender to average.
Bank Statement, DSCR, or Home Equity Line: Which Fits a Co-Owned Home?
It depends on occupancy and on whose income carries the loan. A bank statement loan scrutinizes the borrower’s deposits. A DSCR loan scrutinizes the property’s rent. A home equity line of credit, or HELOC, is a different product entirely, and it sits behind your existing mortgage.
| Factor | Bank statement cash-out | DSCR cash-out | HELOC |
|---|---|---|---|
| Reviewed on | Documented deposits | Property rent | Varies by lender |
| Fits | Owner-occupied or rental | Non-owner-occupied rentals | Existing equity |
| Co-owner signs | Usually yes | Usually yes | Usually yes |
| Cash-out ceiling | 75-80% LTV, by occupancy | About 75% LTV on standard rentals | Varies |
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. They qualify primarily on property-level rental income covering the payment, subject to lender guidelines, and they are exempt from TRID.
For a co-owned rental, ask whose income truly carries the loan. If the property’s rent is strong and your deposits are uneven, DSCR may fit better. If your deposits are strong and the home is your residence, the bank statement route is the one that applies. The complete DSCR loans guide explains how the rent-based test works.
Why Do Co-Owned Files Stall?
Most stalls trace back to a short list of causes. Run this checklist before you apply:
- Unclear roles. Nobody decided who borrows and who only signs.
- Title mismatch. The deed does not match the names on the application.
- Unexplained deposits. Transfers and moved money sit in the average with no explanation.
- Declining deposits. Recent months fall well below the earlier ones.
- Thin equity. After the payoff and any payout, the leftover cash is too small to matter.
- LLC vesting. The lender will not lend against an entity title.
- Reluctant owner. Someone changes their mind during underwriting.
Frequently Asked Questions
Do all owners have to sign?
Usually every owner on title signs the lien, even one who is not borrowing. Whether that owner must also be on the note depends on the program. A non-borrowing owner generally stays off the note. Confirm roles before you apply so nobody learns at the closing table that a signature is missing.
Whose bank statements count?
Only the statements of owners who are borrowing count toward qualifying income. If one owner borrows, that owner’s deposits carry the file. If two borrow, the lender underwrites them together. Most programs want the averaged income to come from one account, though some allow several.
Can a non-borrowing owner stay on title?
Often yes. The owner signs the lien and stays off the note, so their income is not used and their debts are not counted. Some programs add conditions, and treatment varies by lender. A non-occupant co-borrower is also handled differently from one program to the next.
What happens to a co-owner’s equity if the borrower defaults?
The home secures the loan, so a default puts the whole property at risk, including the signing owner’s share. Owners who sign the note are also typically liable for the full debt, as Hemlane explains. A signing co-owner should understand that exposure before agreeing.
Is this a consumer or business-purpose loan?
Occupancy decides. A primary residence or second home is a consumer mortgage. A non-owner-occupied rental, including a short-term rental, is business-purpose. Short-term rental rules can vary by city, county, HOA, and property type, so confirm local rules before relying on projected rental income.
Where to Start
If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker that works with a network of wholesale cash-out refinance lenders, so the right program depends on your occupancy type, your documentation, and who is on title. Lendmire’s owner-occupied consumer lending covers 16 states, so availability depends on where the home sits. Start by deciding which co-owner carries the income, because that choice shapes everything after it.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. NerdWallet Canada, Tenants in Common Mortgage
2. Hemlane, Joint Tenants vs. Tenants in Common FAQs
3. CFPB ATR/QM Small Entity Compliance Guide
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Does a Bank Statement Cash-Out Refinance Make Sense to Invest in the Stock Market? · How Lenders Underwrite a Bank Statement Cash-Out Refinance With a 50% Expense Ratio · Can You Get Approved for a Bank Statement Cash-Out Refinance When the Appraisal Is Low?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.