The Quick Read: Yes, in many cases, a self-employed borrower can pay off a mortgage held by a private bank or portfolio lender with a new loan qualified on 12 or 24 months of bank statements, because the new lender underwrites the file fresh and the old lender’s documentation method does not carry over. Statements replace traditional personal-income documentation, not underwriting. Credit, equity, reserves and the property are all still reviewed, and every figure below is available through select wholesale programs, subject to full underwriting.
- Deposits become qualifying income after an expense ratio is applied, and the lender sets that ratio.
- Leverage steps down as the loan grows, and every loan above $4,000,000 is reviewed case by case.
- Check the old loan for a balloon date and a prepayment penalty before you apply anywhere.
- If the property is a pure rental, a DSCR loan may fit better than a deposit-based loan.
What Does “Private Bank Mortgage” Actually Mean?
The phrase has no single industry definition, but every common meaning leads to the same answer. The new loan is a fresh underwriting, and the old lender’s terms only matter for the payoff.
| What people mean | Who holds the loan | What it changes |
|---|---|---|
| Portfolio loan | A bank keeps it on its own books | Terms are whatever that lender wrote |
| Private-bank relationship loan | A bank that priced you on your relationship | Discretion ends when you leave |
| Non-bank private lender | A private or non-bank lender | Check balloon and prepayment terms |
| Mortgage insurance mix-up | Any lender, with PMI | Unrelated to who holds the loan |
A portfolio loan is simply a mortgage the lender keeps instead of selling. Cornell’s Legal Information Institute notes that balloon loans, which require a lump-sum payoff at maturity, are often refinanced before the balloon comes due. It also warns that a drop in collateral value can block that refinance. Bank-held loans often carry balloon features, so the maturity date matters as much as the balance.
One more point on the relationship loan. Private banks sometimes bend rules because they know you. A new lender has no such history with you. It sees deposits, credit, assets and a property.
How Do Bank Statements Turn Into Qualifying Income?
The lender totals your eligible deposits, subtracts an expense ratio, and divides by the number of months. Across the wholesale network, most programs use 12 or 24 consecutive months of personal or business statements. The bank portfolio program uses 12 months. Scotsman Guide describes the same basic approach, including a 50% expense factor as one example.
Here is how the ratio works on most files we place:
- Lower fixed expense ratio: a service business with no employees.
- Mid-range fixed expense ratio: a business with a small staff.
- Higher fixed expense ratio: a business with a larger staff, or any product business.
- Accountant-provided ratio: a letter from your tax professional can replace the fixed figures.
- Profit-and-loss method: income from a P&L is capped at 80%.
Business statements require at least 25% ownership. Transfers from your own business into your personal account count in full. Statements must be consecutive, and a transaction history never substitutes for them.
A Worked Example in Ratios
Say a founder with 1 to 5 employees submits 12 months of business statements. The underwriter strips out transfers between the borrower’s own accounts, refunds and loan proceeds. The remaining deposits take a 40% expense ratio, so 60% of them counts as income. That total is divided by 12. The result is then tested against debt-to-income, which on most programs can reach 50%.
The quick fix for a weak file is cleaner deposits, not a different ratio. Commingled accounts and large unexplained deposits are the usual reasons the qualifying figure comes in lower than expected.
How Do You Get Out of the Old Loan?
Start with the payoff statement and the note. You need two facts from them: whether a balloon date is coming and whether a prepayment penalty applies. A prepayment penalty is a fee your current lender may charge for paying off the loan early, so it is a cost of leaving the old loan. Any new loan you move into will carry its own terms, which are worth reviewing separately.
Ask your current lender about a modification or re-underwrite before you shop elsewhere. Sometimes it is cheaper. Often it is not, because a bank that holds your loan at a below-market structure has little reason to improve it. Compare the total cost, including any loss of a favorable existing structure, before you assume a move is worth it.
How Much Can You Borrow and at What Leverage?
Loan sizes run from $300,000 to $30,000,000 across two wholesale programs. A portfolio non-QM program carries files to $6,000,000. A bank portfolio program carries twelve-month-statement files from above $4,000,000 up to $30,000,000 on its own ladder, so the two overlap between $4,000,000 and $6,000,000.
Leverage falls as the loan grows. These are ceilings, through select wholesale programs, subject to underwriting:
- Primary residence, rate-and-term refinance: 90% to $1,000,000 with a 680 credit score or higher, and 85% to $2,000,000 with higher score tiers.
- Primary residence, cash-out: 80% on balances to $1,500,000, then lower as the loan grows.
- Investment property, rate-and-term refinance: 85% to $1,000,000 with a 700 score, then 80% through the next size bands. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review.
- Second homes: run about five points below a primary residence at most sizes.
Above $4,000,000, everything is reviewed case by case before submission. On a primary residence, the rate-and-term ladder on review reads 65% to $5,000,000 and 60% to $10,000,000. Never read those as flat promises.
Minimum credit score requirements rise to 700 above the super-jumbo line, which sits at $3,500,000 on a primary residence and $3,000,000 on a second home or investment property. Reserves run 3 months to $500,000, 6 months to $1,500,000 and 9 months above that, with more required per additional financed property.
On cash-out, proceeds are unlimited at or below 60% LTV. Above 60%, the portfolio program caps cash in hand at $1,500,000. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
When Is DSCR the Better Route?
If the property is a pure rental, a DSCR loan often fits better than a deposit-based loan. DSCR stands for debt service coverage ratio. You divide the monthly rent by the full monthly obligation: principal, interest, taxes, insurance and any HOA dues. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. The same idea applies to investors whose cash flow covers ongoing expenses.
The advantage is stacking. A self-employed owner with several rentals can see personal debt-to-income climb with each new loan. A DSCR file tests each property by itself. Your complete DSCR loans guide covers the mechanics in full.
DSCR files still use bank statements, just not for income. They prove funds to close and reserves. Select lenders in the network also offer programs below 1.00 coverage, though leverage and terms adjust.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose loans, they are reviewed differently from a standard owner-occupied mortgage. The CFPB’s Regulation Z commentary treats credit for a non-owner-occupied rental as business purpose, but it carves out an occupancy exception when the owner expects to use the property more than 14 days in the coming year. The Federal Register notice for the ability-to-repay rule says investment-purpose loans are treated as business-purpose loans. If you live in the property, a bank statement loan is the likelier fit.
What If You Qualify on Assets Instead?
Two asset paths exist on the owner-occupied and second-home side.
- Asset allowance: liquid assets are divided by 36, 60 or 84 months to create income. The 84-month version stands alone and applies to any loan above $3,500,000. This path is for primary and second homes, at 80% maximum.
- Assets-only: no DTI is calculated. U.S. liquid assets must equal the loan amount plus closing costs, plus sixty months of any net loss on other residential property.
Retirement accounts count at 70%, or 80% from age 59.5. Business funds, gifts, most trusts, unvested stock and cryptocurrency never count. For a founder just past a liquidity event, assets can beat deposits.
Should You Refinance at All?
The decision is about break-even, not about whether a lender will say yes. The benefits include removing balloon risk, moving to a longer term, and getting past a bank’s per-borrower loan cap. The costs include any prepayment penalty on the old loan, closing costs, and the loss of a below-market structure you may already have.
If your traditional personal-income documentation already shows the income, a deposit-based loan adds nothing. If a balloon is close and your value or income has slipped, waiting makes it harder, not easier. The stronger play is usually to line up the new loan well before maturity. Tax treatment varies by how the funds are used and how the property is held; consult a qualified professional.
Entity matters too. Vesting a rental in an LLC changes the paperwork, and a law-firm analysis from Hunton cautions that business purpose does not mean compliance-exempt. State licensing and other rules can still apply.
Why Do Files Stall or Get Declined?
On files like these, the same problems come up again and again.
- Deposits that include transfers, refunds or loan proceeds, which shrinks the qualifying figure.
- A business under 24 months old, where underwriters weigh liquid assets and credit alongside a shorter history. That is lender judgment, not a fixed rule.
- Appraisals that come in low, which pushes leverage past the ceiling for that size.
- Cash-out proceeds counted toward reserves above the super-jumbo line, which is not allowed.
- Credit events inside the 48-month window on super-jumbo files.
After a decline, the fix is usually a different program, not a bigger pile of paper. A file that misses on deposits may work on assets, and a rental that misses on deposits may work on property cash flow. This is where a broker who sees many lenders’ guidelines earns the fee. Lendmire’s related piece on a bank statement loan mortgage refinance covers the ordinary-balance version.
Key Terms Defined
Bank statement loan: a mortgage that is reviewed around deposits in 12 or 24 months of statements instead of traditional personal-income documentation.
Portfolio loan: a mortgage the lender keeps on its own books instead of selling it.
Balloon payment: a lump sum due at maturity that usually forces a payoff or refinance.
Expense ratio: the share of business deposits the lender treats as costs rather than income.
Prepayment penalty: a fee charged for paying off a loan ahead of schedule.
DSCR: monthly rent divided by the full monthly obligation on a rental property.
Frequently Asked Questions
Can I use my private bank’s own statements for the new loan?
Yes. Statements from any institution work, including the bank that holds your current mortgage, as long as they are consecutive and show the full history. A lender needs the whole period, so a transaction printout does not substitute.
Do I have to refinance with my current lender?
No. The new lender pays off the old loan at closing, and the old lender’s relationship terms do not carry over. It is still worth asking your current lender about a modification first, because it can be the cheaper route.
Can I take cash out?
Often, yes. Cash-out on a primary residence runs 80% on balances to $1,500,000 and steps down at larger sizes. Proceeds are unlimited at or below 60% LTV, and above 60% the portfolio program caps cash in hand at $1,500,000. Cash-out cannot be used to satisfy reserves on super-jumbo files.
What if my statements show large deposits?
Expect questions. Underwriters screen out transfers, refunds and one-off credits, and unexplained large deposits can be excluded from income. A short written explanation with supporting records helps, but it does not guarantee the deposit counts.
Does a business under two years old qualify?
Sometimes. A shorter history is judged alongside liquid assets and credit, and the 12-month statement option exists on some programs. It stays a lender judgment call on each file.
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 broker, not a lender, and consumer mortgage licensing covers 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA and WA. Nothing here is a commitment to lend, and programs change.
Lendmire’s self-employed mortgages page presents both super jumbo programs, bank statement and DSCR, side by side.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage focused on DSCR investor financing, helping arrange programs through wholesale and investor-lending channels in 41 markets, including Washington, D.C. DSCR loans are evaluated by the lender on property cash flow rather than personal income, subject to lender guidelines, supporting LLC closings and accommodating investors with four or more financed properties. Lendmire earned recognition as a Scotsman Guide Top Mortgage Workplace in both 2025 and 2026.
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References
1. Cornell Legal Information Institute, Balloon Payment
2. Scotsman Guide, Rev Up the Engine for Non-QM Lending
3. CFPB, Regulation Z Section 1026.3
4. Federal Register, Ability-to-Repay and Qualified Mortgage Standards
5. Hunton, Beware of Business Purpose
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: Can a Law Firm Owner Qualify for a Super Jumbo on Bank Statements? · Reset vs Bank Statement Refinance vs Recast on an Interest-Only Jumbo · Private Bank Mortgage vs Super Jumbo Bank Statement Loan for an AUM Client
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.