Stand-Alone Second Mortgage – Made Simple
This program is great for self-employed borrowers and real estate investors who may not qualify with traditional income documents.
You can qualify by using 12 to 24 months of business bank statements — or choose the full documentation option if that works better for you.
It’s called a “stand-alone second mortgage” because you keep your existing first mortgage and take out a new, separate loan based on your home’s equity.
You get the money as a one-time lump sum, and
There are no limits on how you can use the funds — whether it’s for investing, home improvements, or other needs.
This is a flexible way to access the value in your home without refinancing your current mortgage.
Tax Returns
You don’t need to provide 1 or 2 years of federal tax returns (1040s), which are typically required for income verification on traditional loans.
W-2 Forms
These loans do not require W-2s since borrowers aren’t salaried employees.
Paystubs
You won’t need to submit paystubs from an employer, as income is verified via deposits.
Traditional Employment Verification
No need for a written Verification of Employment (VOE) from a company HR department.
Debt-to-Income (DTI) Ratio Calculation (in some cases)
Many bank statement lenders use bank deposits as a proxy for income and may not calculate a formal DTI.
Personal Bank Statements (if using business bank statements only)
If you choose to use business statements, some lenders allow you to avoid submitting personal ones (and vice versa, depending on the structure).
Full Documentation of All Business Expenses
While expenses may be factored in as a percentage (usually 50%), borrowers don’t have to show itemized profit-and-loss statements unless specifically requested.
12 or 24 months of consecutive personal or business bank statements
Proof of self-employment (like a business license, CPA letter, or incorporation documents)
A good to strong credit score (often 620–700+)
A reasonable down payment (typically 10%–20%)
Who it’s for:
Self-employed borrowers
Real estate investors
How to qualify:
Use 12–24 months of business bank statements, or
Choose a full documentation option (W-2s, tax returns, etc.)
Loan structure:
It’s a second mortgage, separate from your current first mortgage
Your first mortgage remains untouched
Payout:
You receive a one-time lump sum payment at closing
Use of funds:
No restrictions — use the money for:
Home improvements
Business needs
Debt consolidation
Investments
Or anything else
Key benefits:
Access home equity without refinancing
Flexible income documentation for self-employed borrowers
Ideal for those who don’t qualify for traditional loans