The Quick Read: A recast fits an investor who has idle cash and a loan worth keeping, a reset fits one who needs new terms or proceeds and whose rents carry the debt, and a bank statement refinance fits one whose personal deposits tell a stronger story than the properties do. Only the reset and the bank statement route are new underwriting events. A recast is a request to the servicer.
- A recast keeps the same note, rate and maturity, and re-amortizes the balance after a large principal payment.
- A reset replaces the old note with a new one, so the term, the borrower name and the proceeds can all change.
- A bank statement refinance is a documentation path for that new note, and it tests the owner’s deposits instead of the property’s rent.
- In an LLC portfolio, a personal guarantee usually sits behind the entity under any new note.
- Every figure below describes select wholesale programs and is subject to full underwriting and lender guidelines.
Reset is not a formal loan product. Investors use it as shorthand for refinancing into a new note, which restarts the term and the underwriting. This article uses it that way. The documentation behind a reset can be property-based (rent covering the debt) or deposit-based (bank statements). That is why the second and third options overlap.
Side-by-Side
The recast column shows published industry norms. Terms vary by servicer and note holder, so confirm each point with the servicer that holds your loan. The bank statement column reflects parameters Lendmire sees across its wholesale network. The reset column describes a property-income refinance, which is the usual alternative to a statement file.
| Factor | Recast | Reset (property income) | Bank statement refinance |
|---|---|---|---|
| Review basis | None; original loan stays | Rent versus full monthly debt | Deposit-derived owner income |
| Documentation | Servicer request, proof of funds | Leases or rent schedule, appraisal | 12 or 24 months of statements |
| New underwriting | No | Yes | Yes |
| Property types | Same property, no change | Rentals; varies by program | 1–4 unit residential; condo status matters |
| Entity vesting | Unchanged | LLC borrower, subject to program terms | Depends on program; income tested on owner |
| Reserves | Liquidity for the lump sum | Program reserves apply | 3, 6 or 9 months by loan size |
| Process weight | Lightest; one servicer request | Full file with appraisal | Full file plus deposit review |
| Changes term or proceeds | No | Yes | Yes |
The pattern is simple. A recast adjusts the payment on the loan you already have. The other two replace the loan, and the only difference between them is what the lender measures.
When a Recast Is the Better Fit
A recast is the stronger tool when the existing note is worth keeping and the investor has cash to put against it. It needs liquidity but no requalification, and for an LLC portfolio it is the only one of the three that avoids new documents and new entity review.
The mechanics are narrow. The investor makes a large principal payment, and the servicer recalculates the payment on the lower balance over the same remaining term. As RecastMath’s explainer describes it, the rate and payoff date do not move. A recast also saves less interest than simply keeping the old payment after the same lump sum.
Three limits matter for a portfolio investor.
- Eligibility is set by the servicer and note holder. Conventional loans can generally be recast and government-backed loans generally cannot. Investor and portfolio notes depend on the holder’s own policy. There is no reliable standard for recasting DSCR or other non-QM notes, so an investor should ask the servicer before planning around a recast.
- Interest-only notes usually cannot be recast. If a rental is in an interest-only period, there is typically no amortizing payment to recompute.
- A recast gives no access to equity. It reduces the payment and nothing else. It is the wrong tool for an investor who wants proceeds for the next acquisition.
A recast makes sense for an owner who sold a property, holds the cash, and has a note on a stabilized rental that is already well structured. A reset would add new costs and a new appraisal to fix a problem the investor does not have.
When a Reset (a Property-Income Refinance) Is the Better Fit
A reset is the better fit when the properties carry the file and the investor needs to change something structural. That could be the term, the vesting, the proceeds, or the borrower name. The review basis is the rental itself: monthly rent divided by the full housing obligation of principal, interest, taxes, insurance and any HOA dues.
This route suits an investor whose personal deposits are uneven, because personal income documents are not the yardstick. The file rests on a lease or market-rent schedule, an appraisal, credit and reserves. It also suits an LLC that holds many rentals, because the property income is already entity-level income. Coverage that clears the program’s floor on a given rental keeps that property qualifying on its own. Some select lenders in the network will review coverage below 1.00, but leverage and terms adjust when they do.
For a larger portfolio, sequencing matters. Staging the work lets the investor start with the strongest-coverage properties and learn how the deal works. Refinancing everything at once reduces administrative load but gives a weak property more influence over the group.
The reset is the wrong default when the existing loan has terms you cannot replace. That includes a long fixed period you would give up, or a note you are still seasoning toward a better position. In that case, compare keeping it, recasting it, and resetting it on total cost, not on the headline proceeds. Lendmire’s piece Interest-Only Reset vs Refinance for a Rental Investor in an LLC covers that comparison for a single property. The complete DSCR loans guide walks through how property-income qualification works from the start.
When a Bank Statement Refinance Is the Better Fit
A bank statement refinance is the better fit when the owner’s deposits are strong, the rent is thin relative to the debt, or the properties are still stabilizing. It is reviewed on documented income under the applicable program, subject to lender guidelines. It is the route for a founder, physician, attorney or other self-employed owner whose traditional personal-income documentation understates cash flow.
The mechanics are consistent across programs. As Scotsman Guide’s overview of non-QM lending describes it, a self-employed borrower provides 12 to 24 months of personal or business statements. The lender strips out transfers, loan proceeds and one-time items. It then applies an expense factor to business accounts, or accepts a profit-and-loss statement or a tax professional’s expense statement instead.
Across Lendmire’s wholesale network, the working parameters, through select wholesale programs and subject to full underwriting, look like this:
- Programs. A portfolio non-QM bank-statement program carries files to $6,000,000. A bank portfolio jumbo program takes twelve-month-statement files to $30,000,000 on its own size ladder. Everything above $4,000,000 is reviewed case by case before submission.
- Income. Qualifying income is eligible deposits divided by the statement months, after an expense ratio. The fixed ratios step up with business size and type: a service business with no employees sits at the lowest ratio, a business with one to five employees falls in the middle, and one with six or more employees or any product business carries the highest. An accountant-provided ratio is another option. A profit-and-loss method is capped at 80%.
- Transfers. Transfers from the borrower’s own business into a personal account count at 100%. Statements must be consecutive. Transaction histories do not substitute.
- Ownership. Business statements need at least 25% ownership.
- Credit and debt. The portfolio program’s credit floor is 660, and the bank program’s is 680. Above the super-jumbo line, which is $3,000,000 for an investment property, the floor is 700. Debt-to-income runs to 50%.
- Leverage on an investment property. On a purchase or rate-and-term refinance, ceilings run to 85% on files from $300,000 to $1,000,000 and to 80% from $1,000,000 to $2,500,000. Cash-out ceilings run to 75% through $2,000,000 and 70% from $2,000,000 to $2,500,000. Between $3,000,000 and $4,000,000, an investment-property purchase or rate-and-term file tops out at 60% and a cash-out at 55%. The ceiling is lower at every step as the loan grows. The investment-property figures sit about five points below the primary-residence ladder at the same size.
- Cash-out and interest-only. Cash-out is unlimited at or below 60% LTV and capped at $1,500,000 in hand above that on the portfolio program. The portfolio program also offers a 40-year term with a 10-year interest-only period, to 85% LTV with a 700 credit floor on purchase and rate-and-term files. That figure never raises a cash-out ceiling.
- Reserves. Reserves are 3 months to $500,000, 6 months to $1,500,000 and 9 months above that, plus 2 months per additional financed property up to a 12-month maximum. First-time investors carry 12 months. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
In files like this, the deposit pattern decides more than anything else. A 12-month window that catches a seasonal high can overstate income, and a 24-month window smooths it. Most investors choose the window that reflects a typical year, not the best one.
The LLC adds a wrinkle. A bank statement file tests the individual owner’s income and debt-to-income, not the LLC’s rental income. Every other mortgage you carry weighs against you. An owner with heavy existing debt and a strong-coverage portfolio often gets a cleaner result from property-income qualification.
What the LLC Changes
The entity affects all three options, though not equally. A recast leaves the borrower exactly as it is. A new note brings fresh entity paperwork, typically the articles, operating agreement, EIN and signing authority. Loans to LLCs usually still carry a personal guarantee, and the LLC shields property-level claims but not the guaranteed loan itself. Entity-borrower availability is subject to program terms, so confirm it before planning a vesting change.
One short regulatory point applies. 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. The Federal Register notice on the ability-to-repay rule treats investment-purpose credit as business-purpose. Business purpose is a fact test, though. A Doss Law guide on the business-purpose exemption notes that a property the owner expects to occupy more than 14 days in the coming year can be treated as consumer credit unless it has more than two units. Investors who use a rental occasionally should settle that question with counsel before applying.
When Each Option Is the Wrong Tool
The recast is the wrong tool when you need equity, when the note is government-backed or in an interest-only period, or when the servicer simply does not offer it. It also adds little for an owner who wants a different structure.
The reset is the wrong tool when one weak property would drag a pooled file down. It is also wrong when the existing terms are worth more than anything a new note would offer. And it is wrong when you plan to sell soon, because the new costs may not pay back.
A bank statement refinance is the wrong tool when personal deposits are falling, when existing debt already crowds the 50% debt-to-income ceiling, or when the owner’s income runs mainly through entities that fall below the 25% ownership line. In each case, property-income qualification usually reads the situation more accurately.
Key Terms Defined
Recast: a servicer re-amortization of the same loan after a large principal payment, with the same rate and maturity.
Reset: investor shorthand for refinancing into a new note, which restarts the term and the underwriting.
Bank statement refinance: a new note documented with 12 or 24 months of deposits instead of traditional personal-income documentation.
Expense ratio: the share of business deposits treated as operating cost before income is counted.
Personal guarantee: the owner’s promise to repay a loan made to the entity.
Seasoning: the time a loan or property has been held before a lender will refinance it on certain terms.
Which Refinance for an LLC Portfolio Investor Fits Which Situation?
Run through three investor profiles. Each is hypothetical and uses ratios and percentages only.
Picture an owner of a small LLC portfolio who sold one rental and holds the proceeds. The remaining notes are stable and the coverage on each property is comfortable. A recast on the largest balance lowers that payment without new documents, assuming the servicer allows it. A reset would cost more than it returns.
Consider a landlord who wants to pull equity from a stabilized rental to buy the next one. Coverage on that property clears about 1.2x. A property-income reset fits well, with cash-out ceilings that step down as the loan grows. If the investor is self-employed with deposits that look stronger than the rent, a bank statement cash-out runs on a different basis, and its ceiling on an investment property is also tied to loan size.
Say an operator has a thin-rent portfolio and a strong business. The properties alone would sit near or below 1.00x, and the owner’s deposits are consistent. A bank statement refinance fits, because the deposits carry the file. Sub-1.00 property-income programs exist through select lenders, but leverage and terms adjust. The question worth asking first is whether the portfolio is thin because the properties are still stabilizing or because they are weak.
The balanced verdict is this. The recast is a payment tool. The reset is a structure tool, and it works best when rents carry the debt. The bank statement route is a documentation tool, and it works best when deposits carry it. Many investors end up combining a reset with a statement file in some form, so the better question is what the lender should measure.
Next Step
If you are financing a high-balance property on business or personal bank statements and want to see how the numbers work, Lendmire can help you compare super jumbo bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker that arranges financing through select lenders in its wholesale network, so it can place a file on whichever documentation path reads it best. Consumer mortgage lending is licensed in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Reach the team at 828-256-2183.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
This article is general information, not legal or tax advice. This is not a commitment to lend. Readers should consult a qualified professional, such as an attorney or CPA, about their own situation.
Frequently Asked Questions
Can an LLC portfolio investor recast a DSCR loan?
Maybe, but the servicer or note holder decides, and published norms mostly describe conventional loans. Government-backed loans generally cannot be recast, and notes still in an interest-only period usually cannot either. Ask the servicer directly whether this note type is eligible, what the minimum paydown is, and how often a recast is allowed.
Does a bank statement refinance count the LLC’s rental income?
No, not as the basis for the file. A statement refinance tests the owner’s deposit-derived income and personal debt-to-income. Business statements get an expense ratio, and the lender looks at the owner’s share. Rental income from the properties is better suited to a property-income refinance.
How many months of statements does a bank statement refinance need?
It needs 12 or 24 consecutive months, depending on the program. Across Lendmire’s wholesale network, the bank portfolio jumbo program uses 12 months. Statements must be complete and consecutive, and transaction histories do not substitute for them.
Can a bank statement refinance take cash out of an investment property?
Yes, within the program’s ceilings. On an investment property, the cash-out ceiling is 75% on files from $300,000 to $2,000,000 and steps down as the loan grows. These are ceilings through select wholesale programs, subject to full underwriting. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Does the personal guarantee go away if the LLC is the borrower?
Typically not. A loan to an LLC usually still carries the owner’s guarantee, so the entity protects the property from outside claims but not the guaranteed loan. Treat the guarantee as part of the cost of any new note.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
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References
1. RecastMath — Mortgage Recast Calculator
2. Scotsman Guide — Rev Up the Engine for Non-QM Lending
3. Federal Register — Ability-to-Repay and Qualified Mortgage Standards
4. Doss Law — Business Purpose Exemption Simplified
This article is part of Lendmire’s super jumbo bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Can You Borrow With a Jumbo Bank Statement Mortgage? · Bank Statement Loan vs Asset Depletion Loan for Attorneys · How to Refinance an Interest-Only Jumbo Held in an LLC on Bank Statements
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.