The home-financing market is changing quickly, especially for borrowers who do not have traditional income documents such as W-2s, tax returns, or employer pay stubs. More Americans now earn through self-employment, gig work, consulting, or small businesses. For this group, qualifying for home loans has always been difficult because traditional underwriting rules require documentation that many non-W-2 earners simply cannot provide.

This is where Better Mortgage’s latest product — the Bank Statement HELOC — becomes a major shift in how home equity financing works. Instead of verifying income using tax returns or employer forms, Better allows borrowers to qualify using 12 or 24 months of personal or business bank statements. This is a major break from long-standing industry requirements and opens the door for millions of people to access their home equity.

This blog explains how this product works, why it matters, who benefits the most, and what risks borrowers should consider before applying for a HELOC of this type.

What Is Better Mortgage’s Bank-Statement HELOC?

Better.com introduced a new HELOC product that allows homeowners to qualify using only their bank statements. This program targets the large portion of Americans who earn non-traditional income: freelancers, small-business owners, gig workers, contractors, consultants, and anyone who cannot provide conventional income verification required by most lenders.

Instead of requiring tax returns, W-2s, profit-and-loss statements, or pay stubs, Better analyzes business or personal bank statements to understand actual cash flow. This approach gives borrowers with irregular or seasonal income a more realistic opportunity to qualify.

Better uses its AI-driven underwriting system, known as Tinman, to analyze bank statements and determine the borrower’s income profile. This automation also speeds up the approval process dramatically.

Why This HELOC Matters in Today’s Market

The launch of this HELOC is significant for several reasons:

1. Access to credit for non-traditional earners

Traditional HELOC underwriting is strict, and self-employed borrowers often find it difficult to qualify. With Better’s method, cash flow becomes the core factor, not traditional W-2 income. This model gives access to approximately 36.2 million Americans who work independently or run small businesses.

2. Faster approval and funding

Because Better does not require full appraisals for HELOCs under $400,000, the loan can be approved faster than traditional HELOCs. Many borrowers may receive same-day decisions or approvals within hours instead of waiting weeks.

3. Debt consolidation becomes more affordable

Better reports that customers used HELOC funds to consolidate over $193 million of high-interest consumer debt in Q2 2025. The average borrower saved approximately $1,120 per month after paying off credit card and personal loan balances.

4. Potential credit score improvement

Better’s data shows that many borrowers experience credit score improvements after consolidating debt. Lower-FICO borrowers saw an average credit score increase of around 37 points, with a range between 25–60 points.

These results show a strong connection between accessible home equity lending and overall financial health.

Data Points Table (Text Format Only)

Bank Statement HELOC Key Details

• Lender: Better Mortgage (Better.com)
  
  
• Income verification: 12 or 24 months of bank statements only
  
  
• Traditional documents required: None (no W-2, no tax return, no P&L required)
  
  
• Technology used: AI-driven underwriting (Tinman)
  
  
• Appraisal requirement: No appraisal for loans up to $400,000
  
  
• Target borrowers: Self-employed, small-business owners, freelancers, gig workers
  
  
• Potential eligible population: 36.2 million Americans
  
  
• Consumer debt consolidated in Q2 2025: $193 million
  
  
• Average monthly savings after consolidation: $1,120 per borrower
  
  
• Average credit score improvement: 25–60 points
  
  
• Funding speed: Minutes to hours in many cases

Who Benefits Most from the Bank-Statement HELOC?

1. Freelancers and self-employed professionals

Borrowers with inconsistent income patterns benefit the most. Their income may fluctuate month to month, but their bank statements show stable annual cash flow.

2. Small-business owners

Business owners whose earnings do not match their taxable income can finally qualify based on real revenue flow.

3. Gig-economy workers

Drivers, delivery workers, content creators, and independent contractors often face rejection under traditional rules. Bank statements give lenders a more realistic picture of their earnings.

4. Homeowners needing fast access to cash

Removing appraisal timelines can cut weeks from the approval process.

Risks and Considerations Borrowers Should Know

Although the new HELOC model has major advantages, borrowers need to be aware of potential risks:

1. HELOCs are secured by your home

Because a HELOC uses your property as collateral, failure to repay can result in foreclosure. This makes it riskier than an unsecured personal loan.

2. Interest rates may be higher

Because bank-statement underwriting is considered nontraditional, the borrower may face higher interest rates compared to standard HELOCs.

3. HELOC rates are usually variable

Variable rates can increase over time depending on economic conditions. Borrowers should plan for potential payment changes.

4. Income volatility matters

If a borrower’s cash flow drops suddenly, repayment could become difficult.

5. Over-borrowing risk

Easy access to home equity may lead some borrowers to take more debt than they can manage.

These risks do not remove the usefulness of the product, but borrowers should fully understand them before applying.

How This HELOC Will Change the Market

Better’s bank-statement HELOC is more than a new home equity product; it signals a shift in the entire lending industry.

1. Lenders may adopt alternative underwriting

Once fintechs demonstrate that bank-statement lending is safe, more lenders will likely follow.

2. More borrowers will use HELOCs instead of personal loans

With credit card APRs over 25% and personal loans over 17%, HELOCs are becoming the preferred tool for debt consolidation.

3. Faster, digital approvals will become the new standard

Borrowers will expect same-day approvals instead of traditional multi-week underwriting timelines.

4. AI underwriting will grow

Better’s AI-driven underwriting gives it an advantage. Other lenders may be pushed to invest in similar technology.

(FAQ)

1. What is a bank-statement HELOC?

A bank-statement HELOC allows homeowners to qualify using 12–24 months of personal or business bank statements instead of traditional documents like tax returns or W-2s. Lenders use bank deposits to calculate cash flow and determine income. This makes home equity loans more accessible for self-employed and freelance earners.

2. Who qualifies for this type of HELOC?

Anyone with sufficient cash flow shown through bank statements may qualify, especially freelancers, gig workers, small-business owners, and self-employed individuals. Borrowers must also meet credit score, home equity, and repayment standards set by the lender. Qualification depends more on deposit activity than standard income verification.

3. Are rates higher than regular HELOCs?

Rates may be higher because this is considered a nontraditional underwriting method. Borrowers who want flexibility and faster approval may accept slightly higher rates. However, even with higher rates, HELOCs may still be cheaper than credit card balances or unsecured loans for debt consolidation.

4. How does debt consolidation with a HELOC help?

Borrowers use HELOC funds to pay off high-interest credit cards or personal loans. This can reduce monthly payments significantly. According to Better’s data, borrowers saved an average of $1,120 per month after consolidation. It also reduces credit utilization, which may improve credit scores over time.

5. Is a bank-statement HELOC safe for self-employed borrowers?

It can be safe if the borrower understands their cash flow, plans repayment carefully, and avoids over-borrowing. The biggest risk is that the loan is secured by your home, so consistent repayment is crucial. Borrowers should use HELOC funds responsibly and avoid unnecessary spending.

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