Platinum Lending Solutions / Case Study 03
FINANCING STRATEGY / COMPLEX QUALIFICATION
How a Bank Statement Refinance Helped Self-Employed Oregon Property Owners
Traditional income documentation did not support the loan these Oregon property owners needed. A bank statement program helped them refinance their maturing private loan. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
By Stacy Schlesinger | NMLS #252075
President | Platinum Lending Solutions
Oregon Case Study · Serving Oregon & Washington
At a glance
- The challenge
- Refinance a maturing private loan with complex income and property requirements.
- The approach
- Evaluate business bank statements under the selected lender’s guidelines.
- The outcome
- The completed refinance paid off the private-money balloon loan.
Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
Individual circumstances and results vary. All financing is subject to applicable requirements and lender approval.
The Challenge
An Oregon couple had owned a property for many years. The property previously included an older manufactured home that had been used as a rental. They later replaced it with a new multi-section manufactured home on a permanent foundation.
A short-term private-money loan had funded the replacement. It had a balloon payment, meaning the full remaining balance was due at maturity.
When the loan came due, the borrowers had difficulty obtaining permanent financing through other lending sources.
By the time they contacted Platinum Lending Solutions, they were already operating under an extension of the original loan.
Several factors complicated the refinancing process:
- Self-employment income: One borrower had substantial legitimate business deductions. These reduced the income shown on their tax returns.
- Employment history: The other borrower had been away from the workforce for an extended period.
- Debt-to-income qualification: Traditional income calculations made standard debt-to-income requirements difficult to meet.
- Limited traditional credit history: One borrower had no established credit score or open credit accounts.
- Property eligibility: The manufactured-home classification added lender requirements.
Individually, these issues could limit financing options. Combined, they made finding an appropriate mortgage program particularly challenging.
With their existing financing already extended beyond its original maturity date, identifying a workable solution was important.
My Approach
I started by reviewing the borrowers’ full financial picture and the issues they had faced with traditional loans.
One of the most important issues was how the self-employed borrower’s income was being evaluated.
Legitimate business deductions can reduce taxable income. Traditional mortgage programs have specific rules for calculating self-employment income. The resulting qualifying income may not support the loan a borrower needs.
I compared alternative-documentation loans. One lender offered a bank statement refinance that could address the borrowers’ needs.
Instead of relying exclusively on tax-return income calculations, this program permitted qualifying income to be evaluated using business bank statements. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
I reviewed business deposits and banking activity. The lender’s rules, including business expense calculations, determined how much income could count.
The lender’s program also provided a way to evaluate the borrowers’ limited traditional credit history and the property’s financing requirements.
The borrowers still had to meet the lender’s underwriting rules. We found a program that could evaluate their income, credit, and property together.
The Results
The refinance successfully closed, and the proceeds paid off the outstanding private-money balloon loan.
The borrowers were able to resolve the existing loan obligation without another financing delay.
Although their circumstances had made traditional qualification difficult, an appropriate alternative-documentation program provided a successful path forward.
This case shows why comparing loan programs matters. Lenders may evaluate the same financial circumstances differently.
Why This Loan Was Different
Several underwriting challenges overlapped. The central task was finding a program that could evaluate the borrowers’ self-employment income.
A bank statement mortgage offered a different method of documenting income while still requiring the borrowers to meet the lender’s applicable qualification standards.
The property’s characteristics and the borrowers’ limited traditional credit history also needed to be addressed.
The successful outcome came from understanding how those factors interacted and identifying a lending program capable of evaluating the complete transaction.
The financing strategy was built around the borrowers’ circumstances rather than trying to force their circumstances into a loan program that wasn’t the right fit.
Stacy's Insight
One of the challenges I frequently see with self-employed borrowers is that their tax returns don’t always tell the complete story of their business income.
Business owners may have legitimate deductions that reduce taxable income. Traditional mortgage programs use specific calculations to decide how much income counts.
For borrowers with established businesses and verifiable deposits, bank statement mortgage programs may offer another option. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
These programs still require documentation, financial review, and lender approval. They also have their own requirements involving credit, assets, property eligibility, and other factors.
A bank statement loan isn’t automatically the right option for every self-employed borrower.
But when traditional income documentation doesn’t support a borrower’s financing goals, it can be worthwhile to evaluate whether an alternative-documentation program makes sense.
Business income and mortgage-qualifying income are not always the same. How the loan program evaluates that income matters.
Self-Employed and Having Difficulty Qualifying for a Mortgage?
If you’re a business owner, independent contractor, or self-employed professional, your tax returns may not always support the mortgage financing you’re seeking.
Platinum Lending Solutions works with multiple mortgage lenders offering both traditional and alternative-documentation financing options for qualified borrowers in Oregon and Washington. Warning: A loan using alternative documentation may have higher interest rates, points or fees than a loan using traditional income documentation.
Whether you’re purchasing a property, refinancing an existing mortgage, or exploring a bank statement loan, we can help you evaluate available programs and determine which options may fit your circumstances.
Important Financing Information
This case study describes an individual completed mortgage transaction. Certain property and personal details have been generalized to protect borrower privacy. Individual results are not representative of every borrower and do not guarantee similar outcomes.
Bank statement mortgage programs are subject to lender-specific underwriting requirements, including income documentation, applicable business expense calculations, credit history, property eligibility, equity, and other financial considerations. Rates, fees, terms, and program availability vary. This content is for informational purposes only and is not a commitment to lend or extend credit. All loans are subject to approval and applicable restrictions. Mortgage loans may be arranged through third-party providers.
Stacy Schlesinger | NMLS #252075
President | Platinum Lending Solutions
Platinum Lending Solutions is the registered trade name of NW Processing Group, Inc.
Company NMLS #251560
Oregon License #ML-4475
Washington License #WA CL-251560
7360 SW Hunziker Rd, #103, Portland, OR 97223
(503) 222-4663 | https://222home.com/
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