The Quick Read: To document retirement and brokerage reserves, you give the lender recent, complete statements that show your name, the account’s vested balance, and your right to withdraw the money. The lender then counts a portion of that balance, based on its own rules, and subtracts what you need at closing. The cash you pull out in the refinance does not count as your reserves. Everything here is subject to lender guidelines and full file review, and nothing is a commitment to lend.
What Are Reserves on a Jumbo Cash-Out?
Reserves are money you still own after the loan closes. Lenders measure them in months of your full housing payment: principal, interest, taxes, insurance, and any HOA dues. A jumbo cash-out raises your loan balance, so it raises the payment, and that raises the dollar amount of reserves you need to show.
Why do lenders care? A bigger loan with cash taken out is a bigger bet. Reserves tell the lender you can keep paying if income dips.
Fannie Mae and Freddie Mac do not buy jumbo loans. So no single national rule sets the reserve months or the percentage of each account a lender will count. Each investor sets its own. Across the wholesale programs Lendmire places files with, reserves are measured in months of the full payment and rise with the loan amount. The program also moves with the loan size on appraisals, since a second appraisal kicks in above a lane’s threshold amount.
Lendmire’s jumbo cash-out refinance program works within a 660 decision score on the headline lane, leverage to 90% on purchases (cash-out sits at lower leverage), and loans up to $5,000,000 on the largest lanes. Those figures are subject to lender guidelines. The largest lanes also carry a cash cap on cash-out.
Key Terms Defined
Reserves: Liquid or near-liquid assets left after closing, counted in months of your full housing payment.
Vested: The part of a retirement account or stock award you fully own and can access, as opposed to money your employer could still take back.
Haircut: The discount a lender applies to an account’s balance before counting it. A 100% treatment means no haircut.
Seasoning: How long money has sat in an account. Longer history means fewer questions.
Commingling: Mixing money that must stay separate, such as depositing refinance proceeds into the account you are using to show reserves.
Which Accounts Count, and at What Value?
Most checking, savings, money market, brokerage, and vested retirement balances can count. The percentage the lender uses is the part that varies. Here is how the main account types usually line up.
| Account | Usually counts? | How it is valued | Core documents |
|---|---|---|---|
| Checking and savings | Yes | Current balance | Recent statements, all pages |
| Brokerage (stocks, funds) | Yes | Value net of margin debt | Latest monthly or quarterly statement |
| IRA, SEP, 401(k) | Yes, if vested | Vested balance, lender’s haircut | Statement plus withdrawal terms |
| Vested stock options | Yes | Gain at current stock price | Option count and price statement |
| Unvested RSUs, options | No | Not counted | None |
| Cash-out proceeds | No | Not counted | None |
For context, the Fannie Mae Selling Guide lets stocks, bonds, and mutual funds count at 100% of value for reserves on conforming loans, with no requirement to sell them. That is the agency baseline. A jumbo investor can be more conservative, and many are, especially on retirement money. You may see 60% or 70% figures online. Those are often old agency treatment or one lender’s overlay, not law.
How Do You Document a Retirement Account?
Give the lender proof of three things: you own it, it is vested, and you can withdraw from it. The Fannie Mae guide on retirement accounts says vested IRA, SEP, Keogh, and 401(k) funds are acceptable for reserves. For a 401(k), the lender must confirm the plan allows withdrawals regardless of your current employment status. Funds you can only reach at retirement, termination, or death do not qualify.
Pull this list before you apply:
1. The most recent plan or IRA statement, every page, with your name and account number visible.
2. The vested balance, or the vesting percentage if the statement shows total balance only.
3. Any outstanding plan loan. The lender will want the balance net of what you owe.
4. The plan’s withdrawal terms, usually in the summary plan description or a letter from the administrator.
5. If the account holds stocks or funds, the holdings page, since those assets follow the same valuation rules as brokerage assets.
Do you have to cash the account out? Under agency rules, no. Many borrowers can leave retirement money invested and still use it as reserves. Whether a given jumbo investor wants liquidation is its own call. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
How Do You Document a Brokerage Account?
Send the full statement from the investment firm, and flag anything unusual before the underwriter finds it. The lender values stocks and mutual funds net of margin debt, using your most recent monthly or quarterly statement. If your account reports quarterly, the quarterly statement is the one that counts.
A clean brokerage package includes:
- Every page of the statement, not a screenshot of the balance.
- Proof the account is in your name, or a trust or entity you are listed as owner of.
- The margin balance, if any. Margin loans reduce the counted value.
- Settled positions only. Pending trades and unsettled funds muddy the number.
- For vested stock options, a statement showing the number of options and the option price.
Government bonds are valued at purchase price unless you can document a redemption value. Non-vested options and restricted stock do not count, and neither does stock in an unlisted corporation.
Why Doesn’t My Cash-Out Count as Reserves?
Because the money is borrowed against the house and does not exist until closing. The agency reserve language reduces reserves by cash back received on a refinance, and jumbo investors apply the same logic. The practical result: you must already have the reserves in your own accounts.
This is where files get stuck. A homeowner plans to take cash out, park it in savings, and call it reserves. It does not work. Two habits prevent the problem:
- Keep proceeds separate. Do not deposit them into the account you are using to show reserves.
- Do not double-count. The same dollars cannot cover funds to close and reserves. Lenders subtract funds to close from your available assets first, then measure what is left.
Think of it as a three-step subtraction. Start with the counted value of your accounts. Subtract anything you need at closing. What remains is compared against the required months. Run that math early, because a balance that looks comfortable can shrink fast.
What Does the Process Look Like, Step by Step?
Staging matters as much as the paperwork. Here is the order that tends to work.
Before you apply. Decide which accounts you plan to use. Download full statements. Avoid large transfers, rollovers, or title changes from this point on. Moving money between custodians right before applying forces extra paper.
At application. List every account you intend to rely on. The lender verifies what it relies on, so accounts you do not need can stay out of the file. If income carries the loan, assets used only for reserves are a separate question for underwriting.
During underwriting. Expect a request for the next statement as dates roll over. Market swings can change the counted balance between statements. If your 401(k) dropped, the lender uses the newer figure.
Before closing. Confirm the balance after funds to close still meets the requirement. The appraisal also matters here, since it sets value and therefore leverage, and loan size drives how much in reserves the program wants.
On borrowed money, the agency rule for refinances is that large-deposit documentation is not required, but the lender must still account for borrowed funds and any related liability. Jumbo investors may be stricter, so keep a short written explanation for any big deposit. A loan secured by an asset, such as a 401(k) loan or a securities-backed line, is treated differently from an unsecured loan, and its payment can affect your debt ratio. The ratio ceiling is 50% on the fixed lanes, 45% on the adjustable lane, and 43% on the interest-only lane.
Where Do Files Break?
| Situation | What the underwriter asks | How to paper it |
|---|---|---|
| Recent rollover or transfer | Source and trail of funds | Both custodians’ statements, transfer confirmation |
| Balance dropped between statements | Updated value | Send the newest statement promptly |
| Plan loan outstanding | Net vested balance | Loan balance page from the plan |
| Account titled in a trust | Your ownership | Trust page or custodian letter |
| Large recent deposit | Source | Short letter plus the source statement |
| Unvested RSUs | Nothing counts | Leave them out; use vested assets |
One more mismatch worth knowing. The number on your application and the number on the statement can disagree because of vested versus total balance, plan loans, or pre-tax value. Underwriters write conditions when they do. Use the statement figure on the application and the conflict never starts.
A Modeled Walk-Through
Run the logic on a hypothetical borrower, with every figure a modeled assumption and not a quote. Say you hold a brokerage account, a 401(k), and a savings account, and you are doing a jumbo cash-out at lower leverage than a purchase would allow.
Start with the savings balance at full value. Add the brokerage balance, net of any margin loan, at the lender’s percentage. Subtract what you need at closing. Do not add any cash you will receive from the refinance. Divide what remains by your new full housing payment. If the result meets the lender’s required months, the reserve test passes.
Notice what moved the answer. Vesting, haircuts, funds to close, and the loan’s size all mattered. A larger cash-out raised the payment, which raised the months-times-payment target. Taking less cash out is often the simplest way to fix a reserve shortfall.
Common Mistakes
- Assuming a flat percentage applies everywhere. Percentages come from the investor, not the agencies.
- Believing you must sell investments first. Reserves generally don’t require liquidation under agency rules.
- Counting vested and unvested balances together.
- Depositing proceeds into the reserve account.
- Moving money mid-loan without a paper trail.
- Sending partial statements. Missing pages trigger conditions.
Rules also shift. Treatment of market assets has changed over the years, so be wary of any chart that does not say whose rule it is. For the jumbo definition itself, your county’s conforming limit decides where jumbo starts, and the FHFA publishes those limits each year. Lendmire’s piece on documenting a super jumbo cash-out on a profit-and-loss statement covers a different income path, if yours is self-employed.
Frequently Asked Questions
Can I use my 401(k) or IRA as reserves on a jumbo cash-out?
Usually yes, if the money is vested and you can withdraw it. The lender counts a portion of the balance under its own rules, not necessarily the full amount. Send the full statement and the plan’s withdrawal terms.
Do I have to sell my brokerage account?
Generally no. Agency guidance does not require liquidation of stocks, funds, or retirement assets for reserves, and many borrowers keep them invested. A specific jumbo investor may ask for more, so confirm early.
Can the cash I take out count toward reserves?
No. Cash back from the refinance reduces reserves under agency language, and jumbo investors follow the same logic. Reserves must come from assets you already own.
How many statements will I need?
It depends on the investor. Plan on the most recent statement for each account, every page, and expect an updated one if your file runs across a statement date. Quarterly accounts need the latest quarterly statement.
Do stock options and RSUs count?
Only vested options with a documented value count. Non-vested options and restricted stock do not.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide: Stocks, Stock Options, Bonds, and Mutual Funds
2. Fannie Mae Selling Guide: Retirement Accounts
3. FHFA – Conforming Loan Limit Addendum
This article is part of Lendmire’s Jumbo Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Jumbo Cash-out Refinance: How The Lanes Set Your Maximum · How Much Down Payment a Jumbo Cash-Out Refinance Funds on a Vacation Home · Jumbo Cash-Out Two-Appraisal Requirements and the Value Used
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.