Banks That Offer a Bank Statement HELOC to Refinance an Older HELOC Entering Repayment

The Quick Read: Large retail banks are rarely the source for this loan, because it sits mostly with specialty lenders reached through a broker that shops several wholesale lenders. A bank statement line qualifies the borrower on documented deposits instead of tax returns, and it can pay off an older line from its proceeds at closing. Whether it works depends on the new line’s combined leverage, the property’s occupancy, how the property is titled, and how early you start.

• Occupancy sets the ceiling. On an investment property, the network’s maximum is 70% combined loan-to-value (CLTV), with a 700 minimum credit score.
• Title matters. The property must be held by you personally or in a revocable living trust, not an LLC.
• The new line must cover the old balance and still fit under the CLTV ceiling.
• Start before the old draw period ends. A rushed file leaves no room to fix documentation problems.
• Your deposits are the income proof, so transfers from the old line get stripped out.

Key Terms Defined

Bank statement HELOC: A home equity line of credit that proves income with 12 to 24 months of deposits instead of tax returns. It is a documentation method, not a separate kind of loan.

Draw period: The stretch when you can borrow from the line, usually paying interest only.

Repayment period: The stretch after the draw ends, when you can no longer borrow and must pay down principal.

CLTV (combined loan-to-value): All liens on the property added together, divided by its value.

Payoff letter: The old lender’s written statement of exactly what it takes to close the old line.

Lien position: Whether a loan sits first or second in line to be repaid if the property is sold.

Why a Bank Is the Wrong Frame

The title asks which banks do this. The honest answer is that the category matters more than any single name. Big banks tend to write home equity lines on the home you live in, with full tax-return documentation. Investment-property lines are uncommon there, and alternative documentation is rarer still.

Lendmire is a mortgage broker, not a lender. It works with a network of wholesale HELOC lenders and matches each file to the program that fits. Which lenders write your loan depends on the property type, your credit profile, how much leverage you need, and how you document income.

That table describes categories, not companies. The practical move is to ask a broker which programs accept your property type and vesting before you apply anywhere.

What Happens to Your Old HELOC at the End of the Draw

Once the draw period ends, you can no longer borrow, and the line moves into repayment, according to the CFPB. The lender may set a schedule to repay the full balance, often over ten or twenty years. Monthly payments are often significantly higher. Some plans can even demand the whole balance at once.

That jump is why investors refinance. A Federal Reserve working paper found that borrowers often repay or refinance a HELOC just before the draw ends. It also found balloon structures carry the highest default risk. The paper is older, so treat it as a pattern, not a forecast.

Your Options When the Draw Ends

A bank statement line is one exit among several. Which one fits depends on your documents and your first mortgage.

Renewal is possible but never guaranteed. A bank statement line makes sense when your returns understate your real cash flow. Keeping a low first mortgage in place and replacing only the second lien avoids resetting the whole loan.

How the Refinance Works, Step by Step

1. Read the old note. Find the draw end date, whether repayment amortizes or balloons, and any early-closure fee.

2. Get a payoff letter. The new line’s proceeds pay off the old balance at closing.

3. Document income. The lender reviews 12 to 24 months of personal or business deposits.

4. Underwrite the file. The lender reviews credit, combined liens, the property and title.

5. Close and release. The old line is paid, closed and released from title.

Do not skip the release. A line paid to zero but still open can stay on title and count against your CLTV.

How Lenders Read Your Deposits

Deposits are adjusted before they count. Transfers between your own accounts come out. Draws from the old HELOC come out too, because borrowed money is not income. Business accounts typically get an expense factor applied. What is left is compared with your debts, including the first mortgage, against a maximum debt-to-income ratio of 50%. That drops to 45% for credit profiles from 600 to 679.

This is why a borrower who has been living off the old line can look weaker than expected. Clean, separate accounts help.

Network Parameters on an Investment Property

The following applies to a standalone line on an investment property through select wholesale lenders, subject to lender guidelines and full file review.

• Ceiling: 70% CLTV, at a 700 credit score or higher, on lines up to $500,000.
• Structure: a 5-year interest-only draw followed by a 25-year fully amortizing repayment. Pricing floats and does not convert to fixed.
• Draw at closing: at least 75% of the line.
• Property types: single-family, 2-4 units, PUD, townhome and condo, including non-warrantable. Manufactured homes, co-ops, condotels, log homes, commercial and mixed-use are not eligible.
• Valuation: lines at or below $500,000 ordinarily use an automated valuation, though you can request a full appraisal.
• Availability: Lendmire’s 16 full-service states (AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, WA). Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.

On a primary residence the picture differs. Ceilings reach 90% CLTV only at 720 or better, and only up to $500,000. Do not assume that number applies to a rental.

Title, Vesting and Where the Plan Breaks

LLC title is the sharpest edge. These lines require the property to be held by you personally or in a revocable living trust. LLCs, corporations, partnerships and irrevocable or land trusts cannot hold title. A property already deeded to an LLC needs a vesting change, or it belongs in a DSCR cash-out refinance instead. A DSCR loan is underwritten on the property’s rent against its payment, while this line is underwritten on your income and debt-to-income ratio. The complete DSCR loans guide walks through that alternative.

Other break points:

• Balloon notes. If the full balance is due at draw end, the real exits are a refinance or a sale.
• Frozen lines. Lenders can freeze or reduce a line if values drop or finances worsen, so do not plan on the last day.
• Combined leverage. If the old balance plus your first mortgage exceeds 70% of value on a rental, this route does not fit as sized.
• Exposure. A borrower is limited to three lines, and owning more than 15 financed properties is a disqualifier.
• Second position. Lines can sit in first or second lien position. Lendmire’s piece Banks That Offer a Bank Statement HELOC When Banks Won’t Do Second Position covers that edge in depth.

If You Are Declined or Already in Repayment

Already in repayment is not the end of the road, but your options narrow and the payment is already higher. If a new line is declined, work down the list. Ask whether a smaller line fits under the CLTV ceiling. Consider paying the old balance down first. A fixed home equity loan or a cash-out refinance of the first mortgage may fit better. If the property sits in an LLC, a DSCR cash-out refinance may be the cleaner path. Qualification there rests primarily on property-level rental income covering the payment, subject to lender guidelines.

Readiness Checklist

• Old HELOC statement and payoff letter
• 12 to 24 months of personal or business bank statements
• First mortgage statement
• Proof of title and vesting
• Insurance declaration page
• Credit report that will be under 90 days old at closing

Next Step

If you are weighing a new line against a cash-out refinance and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, your credit profile, combined leverage and your goals. An illustrative calculator on this page can show a rough picture, though it is an estimate, not a quote.

About Lendmire

Lendmire is a mortgage brokerage (NMLS# 2371349) arranging home equity lines of credit — primary-residence, second-home and investment-property lines — through a wholesale lending network in its 16 full-service states. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. CFPB – What is a HELOC

2. Federal Reserve FEDS paper on HELOC borrowers facing payment changes