The Quick Read: The two loans answer different questions: a bank statement loan asks how much cash moves through your accounts each month, and an asset-based mortgage asks how much you hold today. A Montana business owner with steady deposits and modest savings usually fits the bank statement route, while an owner with large balances and uneven income usually fits the asset route.
- The bank statement loan builds qualifying income from 12 or 24 months of deposits.
- The asset-based mortgage has two paths. One covers the whole loan with eligible assets and documents no income. The other turns assets into monthly income.
- Both loans are fully documented, because the lender verifies deposits or balances from statements.
- An owner can hold either loan on a home and still use a separate investor loan for rentals.
Side-by-Side
The table below shows how the two loans differ. The asset-based column reflects the figures in Lendmire’s wholesale network, subject to underwriting. The bank statement column shows published industry norms, which vary by lender.
| Factor | Asset-Based Mortgage | Bank Statement Loan (industry norms) |
|---|---|---|
| Review basis | Eligible assets, either covering the loan or converted to income | Income averaged from deposit history |
| Documentation | Account statements; no employment or income on the qualifier path | 12 or 24 months of business or personal statements |
| Typical support | Statement seasoning and asset source review | Often a CPA letter, business proof, sometimes a P&L |
| Property types | Principal residence and second home; investment only on the depletion path | Varies; most often owner-occupied and second homes |
| Entity vesting | Accounts held in the borrower’s own name | Usually a personal borrower; business deposits counted by ownership share |
| Reserves | None at or below 75% LTV on the qualifier path | Commonly required; amount varies by lender |
| Main watch-out | Capital is earmarked and haircuts shrink the pool | Lumpy or commingled deposits can lower the average |
What “Asset-Based” Means Here
In this comparison, an asset-based mortgage is a residential loan qualified on your balance sheet. It is not a commercial asset-based loan, which lends against company inventory or receivables. It is also not a pledged-asset loan. Across the wholesale network, the residential version comes in two forms, and a borrower is reviewed on one path at a time.
The first is the asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan. No employment or income is documented.
The second is the asset depletion path. Usable assets are divided by 60 months to create a monthly qualifying income. That income must carry the housing payment and other debts through the debt-to-income test.
How a Bank Statement Loan Works for an Owner
A bank statement loan turns deposits into income. The underwriter takes 12 or 24 months of statements, removes transfers and loan proceeds, and averages what remains. Scotsman Guide’s coverage of non-QM lending describes these programs as reflecting cash flow rather than traditional personal-income documentation. The same article puts non-QM at about 5% of all mortgages, so this is a mainstream product.
On business accounts, most programs apply an expense factor to gross deposits. Many also prorate for ownership share. A CPA letter often supports that factor. Personal-account programs screen deposits differently, and Lendmire’s piece How to Use a Personal vs Business Account for a Bank Statement Mortgage covers that choice in detail.
The resulting income goes through the debt-to-income test with the new housing payment. Credit and reserves are reviewed on top of that.
When the Asset-Based Mortgage Is the Better Fit
This loan fits the owner whose balances are large and whose documented income is not. That includes someone who just sold a business, received an inheritance or settlement, or lives off a portfolio. It also fits an owner between ventures who has a gap in business history.
The qualifier path suits the borrower who can cover the loan amount outright with eligible assets. Loans run up to $4,000,000, with leverage up to 80% on a purchase and 75% on a refinance of a principal residence or second home. Credit starts at a 600 minimum score, through select programs. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The usable share of each balance matters. On the qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Here is an illustrative qualifier file. An $800,000 loan, with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ and $200,000 in savings, counts $330,000 plus $270,000 plus $200,000. That is $800,000 of usable assets, which is reviewed on assets alone, subject to underwriting.
The depletion path works differently. Cash and certificates of deposit count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% and real-estate equity at 60%.
Take $1,500,000 in securities (80% counts as $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 usable, divided by 60 months, or $25,000 of monthly qualifying income. The lender’s own calculation governs, and that income still has to clear the debt-to-income test.
Depletion-path leverage is up to 80% on a purchase or rate-and-term refinance of a principal residence or second home, and 60% on a cash-out refinance. On an investment property it is 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loans run from $125,000 to $3,500,000. Cash-out proceeds never count as qualifying assets.
Montana is among the 16 states where Lendmire’s consumer mortgage lending is licensed, and the program figures do not change by state.
When the Bank Statement Loan Is the Better Fit
This loan fits the active owner whose business deposits are strong and whose liquid savings are thin. Many owners reinvest profits, so their traditional personal-income documentation shows little and their accounts show a lot. If cash flows through the business month after month, deposits can document far more income than an asset pool would convert to.
It also fits the owner who does not want capital earmarked. Asset depletion ties up the funds used for qualifying, so those dollars are not free for a down payment, a remodel or reserves. A bank statement loan leaves your portfolio untouched in the file.
Consider an owner whose receipts swing with the season. Twelve months of statements may show a thin stretch, while 24 months may smooth it out. A longer window can help in that case, but it can also pull in a weak year. The owner should run both windows before choosing.
When Both Could Work
Some owners qualify on either route. The practical test is to compute both numbers. Take your averaged deposit income after the expense factor, and compare it with usable assets divided by 60. The higher figure gives the stronger file.
The two sources cannot be counted twice. The same dollars cannot serve as deposit income and as depletion income, and underwriters strip the overlap. On the depletion path, asset-derived income may also supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Where Owners’ Files Run Into Trouble
Commingled accounts. A personal account full of business receipts creates questions on a bank statement file. The same accounts can complicate asset counting, because business balances beyond your ownership share do not count as your assets.
Large one-time deposits. A single transfer or a sale can inflate a deposit average, so underwriters flag or exclude it. On the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from the 120-day seasoning rule.
Assets that do not count. On the depletion path, custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options and non-vested restricted stock units are not eligible. Cryptocurrency, precious metals and collectibles are not published as eligible on either path. The documented route is to convert them into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Seasoning. The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants statements at least 120 days old at application, plus the most recent one within 45 days.
Credit. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on that path needs a 700 score. Housing history of 0x30x12 is standard, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, cover the entire loan with no income documented.
Asset depletion: A path where usable assets are divided by 60 months to create qualifying monthly income.
Expense factor: A percentage taken off business-account deposits before the remainder counts as income.
Seasoning: The time funds must sit in an account before they count.
Haircut: The share of an asset’s balance that is discounted because the asset can lose value or be hard to reach.
Where Rentals Fit
Both loans qualify the borrower, so each new mortgage stacks onto one debt-to-income base. Investor rental financing works differently. These 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 CFPB’s Regulation Z § 1026.3 treats credit for a non-owner-occupied rental as business-purpose, and it applies a separate rule if the owner expects to stay more than 14 days.
That is why a self-employed owner often holds a bank statement or asset-based loan on a residence and a DSCR loan on each rental. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Lendmire’s complete DSCR loans guide explains how that works.
Neither a bank statement loan nor an asset-based loan relies on traditional personal-income documentation such as W-2s, though both remain subject to lender guidelines. Even so, the lender must verify the income or assets it relies on using third-party records. That is why statements on either path need to be clean and in your own name.
The Verdict
If your strength is monthly cash flow, start with the bank statement loan. If your strength is what you hold, start with the asset-based mortgage. If you are strong in both, compare the two income numbers before choosing, since the stronger file usually carries the better terms.
The asset-based route costs you flexibility, because the assets used for qualifying are earmarked. The bank statement route costs you in documentation, because deposits must be clean, consistent and traceable. Neither is a shortcut, and both are underwritten individually.
Frequently Asked Questions
Are an asset-based mortgage and a bank statement loan the same thing?
No. A bank statement loan calculates income from deposits. An asset-based mortgage is reviewed around assets, either covering the loan outright or converted into income over 60 months. Both are non-QM products placed through select lenders.
Do I have to sell my investments to qualify?
No. The depletion calculation is a qualifying convention, so you keep owning the portfolio. The assets stay documented and must remain seasoned and in your name. They are simply earmarked in the file.
Can a business-account balance count as an asset?
Generally only to the extent of your ownership share, and only if the lender accepts the account. Business balances beyond that share are not published as eligible. A common route is to move your share into a personal regulated account and let it season.
Can I use retirement funds?
Yes, with a haircut. On the qualifier path they count at 90% under age 59½ and 100% at 59½ or older. On the depletion path they count at 70% at any age. Tax treatment varies; consult a qualified professional.
Do I need two years in business?
Bank statement programs typically look at 12 or 24 months of statements, so history matters. The asset qualifier path documents no employment or income, which is why it suits owners with a gap in business history. Lender guidelines and credit still apply.
Next Step
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage and your goals. Call 828-256-2183 or request a quote.
Lendmire’s asset-based mortgage in Montana page presents the program for Montana borrowers.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of traditional income documentation, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Scotsman Guide, “One out of 20 mortgages are non-QM”
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get an Asset Qualifier Mortgage With a Co-Signer? · Can a Business Owner Use Company Cash to Qualify for an Asset-Based Mortgage? · Can You Use an Asset-Based Mortgage to Buy a Pennsylvania Home for Your Parents?
Guides: Asset-Based Mortgage in Montana
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.