Bank Statement Guide
Are There Prepayment Penalties on Bank Statement Loans?
Many bank statement Non-QM loans include prepayment penalties — especially on investment and cash-out files. Know the term and step-down before you close.
Why Non-QM Investors Use Prepays
Prepayment penalties protect investor yield on bank statement loans held in portfolio or sold to private-label buyers.
Planning Around a Prepay
Four exit strategies Indiana borrowers use when a prepayment penalty is on the note.
How We Flag Prepay Terms Early
Ryan & Steve disclose prepayment penalty length, step-down percentages, and triggers on your initial quote — not at the closing table.
We compare investors with and without prepays so you see the rate trade-off before you choose a bank statement path.
If you expect to sell, flip, or refinance within the prepay window, we steer toward no-prepay products or shorter terms even when the note rate is slightly higher.
Prepay review checklist
- — Confirm prepay term length and step-down schedule
- — Identify sale, refinance, and curtailment triggers
- — Compare no-prepay rate alternatives side by side
- — Align your exit timeline before you lock
Keep Exploring
Related bank statement guides and Non-QM resources from Ryan & Steve.
Can I Refinance?
Rate-and-term refi timing when a prepay is still active.
What Interest Rates Apply?
How prepay vs. no-prepay structures affect pricing.
Can I Do Cash-Out?
Cash-out files where prepays are most common.
Bank Statement Loans Overview
Full program hub with guidelines and Get Pre-Approved CTAs.
2MG Daily
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Frequently Asked Questions
Do bank statement loans have prepayment penalties?
Many bank statement Non-QM products include prepayment penalties — especially on investment and cash-out files. Some primary-residence options offer no-prepay structures at a higher rate.
How long do prepayment penalties usually last?
Common structures run 1–5 years, often with a declining step-down (for example 5-4-3-2-1 percent of the balance). Exact terms are investor-specific and disclosed on your Loan Estimate.
Does selling the home trigger a prepay?
Usually yes — prepayment penalties typically apply when you pay off the loan early through sale, refinance, or large principal curtailments. Partial prepay thresholds vary by investor.
Are no-prepay bank statement options available?
Yes on some investors and occupancy types, often at a higher note rate or stricter credit/LTV tiers. Ryan and Steve flag no-prepay paths early if you plan to sell or refinance within a few years.
Worried About a Prepayment Penalty?
Ryan & Steve will quote prepay and no-prepay bank statement options before you lock — so your exit plan is clear from day one.
The 2 Mortgage Guys
Ryan Minick and Steve DeLon — Branch Managers & Senior Loan Officers at Luminate Bank. Based in Kokomo, Indiana. Lending nationwide since 2005.
Contact
Ryan Minick NMLS# 203249
Steve DeLon NMLS# 202876
Luminate Bank NMLS# 1281698
Kokomo's Mortgage Team. Lending Nationwide.
1221 Appletree Lane, Kokomo, IN 46902
Luminate Bank NMLS 1281698 Bank Headquarters 2523 S. Wayzata Blvd., Suite 100 Minneapolis, MN 55405 (952) 939-7200. This is not an offer to enter into an agreement. Information provided is outlining the minimum down payment requirements as allowed by specific loan program and product guidelines and any information, rates and programs are subject to change without prior notice and may not be available in all states. All loans are subject to credit and property approval. Luminate Bank is not affiliated with any government agency. All rights reserved.
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