The Quick Read: A recast suits a borrower who has a lump sum and a note the servicer will re-amortize, a refinance suits one who wants to change the review basis, structure, vesting or interest-only clock, and keeping the loan suits one whose current note still fits the plan and the exit. Which one wins depends on the note, the servicer, and what your next financing needs to look like.
- A recast lowers the payment on the same note and generally does not re-underwrite income, credit or the property.
- A refinance is a new loan, so deposits, assets or rent get reviewed again, and the structure can change.
- Keeping the loan is a real strategy, not a default, and it often wins when the note is working.
- On a super jumbo note, recast eligibility is set by the note and the servicer, not by a standard right.
- Every figure in this piece reflects select wholesale programs, subject to full underwriting. This is not a commitment to lend.
The Honest Answer First
Each option fits a different borrower. Recast is for the investor who has just sold something, has idle cash, and likes the current note. A refinance is for the investor whose problem is the loan itself: an interest-only period about to end, a review basis that no longer fits, a vesting change, or cash needed out. Keeping the loan is for everyone else, including many people who assume they must act.
Here’s the catch. A recast is not available on every note. A super jumbo bank statement loan is usually a non-agency note. Published industry norms say servicers set their own rules for jumbo balances, and some exclude interest-only and adjustable notes entirely. Ask before you plan around it.
Lendmire is a broker. It places refinances through its wholesale network and can talk through alternatives with you, but it never services or recasts your note. That part sits with whoever holds your loan.
Side-by-Side
The refinance column reflects what select wholesale programs in Lendmire’s network typically review. The recast column shows published industry norms, not a program rule, and the exact terms live in your note.
| Factor | Keep As Is | Recast (industry norms) | Refinance |
|---|---|---|---|
| Review basis | Nothing new | Generally nothing re-run | New file: deposits, assets or rent |
| Documentation | None | Servicer request form | 12 or 24 months of statements, or lease and rent schedule |
| Property types | As financed | As financed | Bank statement: primary, second, investment. DSCR: investment only |
| Entity vesting | Unchanged | Unchanged | Can change; depends on program |
| Timeline | None | Short servicer process | Full application, appraisal, title, closing |
| Reserves | Your existing liquidity | Lump sum draws down liquidity | Reviewed again, scaled by loan size |
| Interest-only clock | Keeps running | Usually unchanged; some servicers exclude | Can be reset |
Read the table by row, not by column. The documentation row and the vesting row decide more files than any other.
When Keeping the Loan Is the Better Fit
Keeping the note wins when the structure still matches your plan. If the interest-only period has years left, the property is performing, and your exit is a sale rather than a refinance, there’s often nothing to fix. Skip the paperwork.
Keeping also wins when a new application would hurt you. A refinance re-reviews credit, deposits and the property. Picture a founder whose business deposits dipped in the most recent statement months because of a timing swing. On the original note, that dip never gets retested. On a new application, it might. The old loan carries the underwriting you already passed.
There’s a second reason, and it’s liquidity. Paying down principal or funding a refinance uses the same assets lenders count toward reserves. Through select wholesale programs, reserves typically run 3 months on loans to $500,000, 6 months to $1,500,000 and 9 months above, plus 2 months for each additional financed property up to a 12-month maximum. Cash you spend on a paydown may be cash you need to show later.
Keeping is the wrong call in a few cases:
- The interest-only period ends soon and you can’t absorb the step-up.
- The note carries an adjustment date you don’t want to meet.
- Your income documentation is now stronger than it was, and a new file would open better leverage.
When a Recast Is the Better Fit
A recast makes sense when the note is fine and the balance is the issue. You make a lump-sum principal payment. The servicer re-amortizes the remaining balance over the remaining term on the same note, and the monthly obligation drops. That’s the whole transaction.
The appeal is what doesn’t happen. Industry norms describe no new credit pull, no new income verification and no new appraisal for a recast. Your bank statement income is never re-tested. Vesting, term and covenants stay as they are. For a borrower who just sold a property or received a liquidity event, that simplicity has real value.
The limits matter more on a super jumbo note than on a conventional one:
- Eligibility is a servicer and note question. Government-backed loans can’t be recast at all, and non-agency notes follow whatever the servicer sets.
- Some servicers exclude interest-only and adjustable loans. Many large bank statement notes are exactly that.
- A recast doesn’t extend or restart an interest-only period. If your concern is the end of that period, a recast addresses the wrong problem.
- Servicers vary on minimum lump sums, fees and how often you can recast.
- A recast changes nothing about vesting. Whether you can move title into an LLC depends on the note’s transfer terms, so read the due-on-sale language before you try.
Think of it this way. A recast is a payment tool, not a structure tool. If the payment is the problem, it can work. If the loan is the problem, it can’t.
One more flip point. If the lump sum would leave you thin on liquidity, a recast can feel good and still be a poor trade. Cash you’ve paid in can’t be pulled back out except through a cash-out refinance, which means a new file.
Lendmire’s piece Reset vs Recast vs No-Cash-Out Bank Statement Refinance on a Jumbo goes deeper on the mechanics of each.
When a Refinance Is the Better Fit
A refinance is the right tool when the loan needs to change. It replaces the old note, so you can change the program, the review basis, the interest-only structure, the vesting and the cash position all at once. It’s the only one of the three that does any of those things.
Switching the basis. A bank statement refinance is reviewed on documented deposits under the applicable program, subject to lender guidelines. Through select wholesale programs, that means 12 or 24 consecutive months of personal or business statements, with an expense ratio applied to business accounts. Fixed ratios commonly run 20%, 40% or 50% depending on staffing and business type, or an accountant-provided ratio can substitute. Transfers from your own business into a personal account count in full. Credit typically starts at 660 on the portfolio non-QM program (loans to $6,000,000) and at 680 on the bank portfolio program, with debt-to-income up to 50%. Above the super jumbo line, the portfolio non-QM program moves its floor to 700.
Switching to DSCR. If the collateral is a rental, a DSCR refinance is a different kind of file. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The reviewer looks at a lease or rent schedule rather than your personal deposits, which can matter a great deal for an investor with several financed properties. DSCR is for investment property only. It won’t work on a primary residence or second home. For borrowers who want more detail on this path, the complete DSCR loans guide covers it.
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 Regulation Z business-purpose exemption requires the lender to determine the primary purpose each time, so a rental refinance should be documented honestly. Credit to a borrower that isn’t a natural person is addressed separately in 12 CFR 1026.3, and LLC vesting is possible, subject to program terms. A law-firm guide to the business-purpose exemption notes that a cash-out used for personal expenses can change the analysis.
Resetting the structure. On purchase and rate-and-term files, the portfolio non-QM program offers a 40-year term with a 10-year interest-only period at up to 85% LTV with a 700 credit floor. The bank portfolio program offers 5- and 7-year fixed-period adjustables with interest-only at up to 60% LTV. A refinance can restart that clock. A recast can’t. Just don’t stack one interest-only term on another without a plan for the end of it. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Changing leverage and cash. Leverage steps down with size. On a primary-residence rate-and-term refinance, the ceiling is 90% on loans to $1,000,000, 85% to $2,000,000 and 80% to $3,000,000, then drops further in the top bands. On an investment property rate-and-term refinance, loans from $300,000 to $1,000,000 can reach 85%, with 700 or higher credit at that leverage. On a primary-residence cash-out, the ceiling is 80% on loans to $1,500,000. Cash-out proceeds are unlimited at or below 60% LTV and capped at $1,500,000 cash in hand above 60% on the portfolio program. Above $4,000,000, every figure is reviewed case by case before submission. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
For a comparison of the two refinance types, see Lendmire’s article Rate-and-Term vs Cash-Out on a Super Jumbo Bank Statement Refinance.
How to Choose Between Refinance, Recast and Keeping
Run the questions in order. The first honest “yes” usually points you to the answer.
1. Is the note itself working? If structure, term and vesting still fit, you’re choosing between keeping and recasting.
2. Do you have spare cash after reserves? If not, recasting is off the table. Keep or refinance.
3. Will the servicer recast this note? Ask in writing. Interest-only and adjustable notes are the likeliest exclusions.
4. Is an interest-only end or adjustment date approaching? If yes, a recast won’t solve it. A refinance might.
5. Would your income look better under a different basis? A strong lease on a rental can support a DSCR file, while deposits may suit a primary residence better.
6. Does the old note carry prepayment terms? Check before you commit to anything that pays it off.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Three Borrowers, Three Different Answers
Picture a physician-owner who sold a practice stake and holds a home loan with years of interest-only time left. The note works. Recast, if the servicer allows it, or simply keep the cash liquid.
Say you own a rental financed on bank statements, with the interest-only period ending soon and a strong lease in place. A DSCR refinance moves the file from deposits to property cash flow and resets the structure. That’s the case where refinancing earns its friction. If the coverage comes in below 1.00 on the lease, programs below 1.00 do exist through select lenders in the network, though leverage and terms adjust, and approval isn’t assured.
Consider an entertainer with uneven deposits who needs to pull equity for a new purchase. A recast can’t do that, since it only lowers the payment. A cash-out refinance can, within the ladder’s cash-out ceilings. On a primary residence above $4,000,000, everything is reviewed case by case, and cash-out proceeds can’t satisfy reserves at that size.
Key Terms Defined
Recast: A lump-sum principal payment after which the servicer re-amortizes the remaining balance on the same note.
Refinance: A new loan that pays off the existing note and carries its own terms and underwriting.
Interest-only period: The stretch of the note during which the payment covers interest alone, ending in a step-up.
Bank statement qualification: A review of eligible deposits over 12 or 24 months, after an expense ratio, instead of traditional personal-income documentation.
DSCR: A rent-to-debt ratio that compares a property’s rent to its full housing payment, used on investment property only.
Frequently Asked Questions
Can I recast a super jumbo bank statement loan?
Sometimes, but it isn’t a standard right. Published industry norms say servicers set their own rules on jumbo balances, and some exclude interest-only and adjustable notes. Ask the servicer directly, and ask for the answer in writing before you plan around a lump-sum payment.
Does a recast extend or restart my interest-only period?
Usually not. A recast re-amortizes the balance on the existing note and leaves its structure alone, so an interest-only period keeps its original end date. If the end of that period is the real worry, a refinance is the tool that can reset the structure, subject to program guidelines.
Will a refinance re-test my bank statement income?
Yes. A refinance is a new application, so deposits, credit and the property are reviewed again. Through select wholesale programs that typically means 12 or 24 consecutive months of statements. A recast, by contrast, generally doesn’t re-verify income at all.
Can I move a primary residence loan into DSCR?
No. DSCR is for investment property only, and it qualifies primarily on rental income covering the payment. A primary residence or second home stays on a bank statement, asset-based or similar path.
Is keeping my current note ever the smarter move?
Often, yes. If the structure still fits, the exit is a sale, and a new file would put stable underwriting at risk, doing nothing avoids a new application and preserves your liquidity.
The Verdict
Keep the loan when the note fits the plan. Recast when you hold surplus cash and the servicer allows it. Refinance when the loan itself needs to change: the interest-only clock, the review basis (a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines), the vesting, or the cash position. None of the three wins everywhere, and the flip point is almost always liquidity or structure.
A loan that is already working deserves a harder look before you replace it.
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 serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB, Regulation Z § 1026.3 (business-purpose exemption)
3. 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 to Document a 40-Year Super Jumbo Bank Statement Loan · How a 5-Year ARM Super Jumbo Bank Statement Loan Works · How to Get a Super Jumbo Bank Statement Loan as a Physician or Realtor
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.