The Quick Read: Lenders underwrite this loan on three separate tracks: they build income from your cleaned-up bank deposits after an expense factor, they treat the HELOC payoff as a cash-out refinance and size leverage on a ladder that steps down as the loan grows, and they require a clean first-lien position with reserves held outside the loan proceeds. Every figure below comes through select wholesale programs, subject to full underwriting, and nothing here is a commitment to lend.
- Your qualifying income comes from 12 or 24 consecutive months of statements, minus transfers, loan proceeds, gifts and one-time deposits, then reduced by an expense factor.
- Paying off a HELOC that did not fund this property’s purchase generally makes the loan cash-out, even when no cash comes back to you.
- The cash-out ceiling falls as the loan gets larger, and every loan above $4,000,000 is reviewed case by case before submission.
- Above the super jumbo overlay line, cash-out proceeds cannot count as your reserves.
- The HELOC must be paid and closed, or its lender must sign a subordination, before the new first lien can take position.
Key Terms Defined
Super jumbo: a loan size above the line a given lender chooses. No official definition exists, so each program draws its own line.
Bank statement loan: a mortgage that is reviewed around deposits in your personal or business accounts instead of tax returns. It is still fully underwritten.
Expense factor: the percentage of business deposits the underwriter treats as operating costs and subtracts before counting income.
HELOC payoff: retiring a home equity line of credit with the new loan’s proceeds, then closing the line so it no longer sits on title.
Cash-out versus rate-and-term: a rate-and-term refinance replaces the old loan without extracting equity. A cash-out refinance takes equity out, and it gets a lower leverage ceiling.
Reserves: liquid funds you hold after closing, measured in months of the housing obligation.
Subordination: a written agreement in which an existing lien holder accepts second position behind the new loan. The lender can refuse.
What This Loan Is, and Why the Size Changes the Rules
This is a portfolio-style mortgage for a borrower whose tax returns understate real income. Founders, physicians, attorneys and entertainers often fit. Deposits show the cash flow, and the loan is large enough that the leverage ladder, not just your credit score, decides what you can take out.
“Super jumbo” has no fixed legal meaning. NerdWallet’s jumbo explainer notes that jumbo lenders set their own requirements and that these loans generally stay on lenders’ books as portfolio loans. Across the wholesale network a broker works with, that matches what you see daily. Two program types cover this space.
A portfolio non-QM program carries bank statement files from $300,000 up to $6,000,000. A bank portfolio jumbo program carries twelve-month-statement files up to $30,000,000 on its own ladder. Its bands begin above $4,000,000 on a primary residence and overlap the first program up to $6,000,000. Above $6,000,000 it stands alone. Files above $4,000,000 are reviewed case by case before submission.
One more point on the label. Non-QM means the loan sits outside the Qualified Mortgage box. It does not mean outside underwriting. NerdWallet’s non-QM explainer describes borrowers proving repayment ability with bank statements, tax returns, asset qualifiers or 1099s, depending on the lender.
The Underwriting Sequence, Step by Step
An underwriter works the file in a fixed order. Each step answers one question, and a failure at any step stops the file.
1. Classify the loan. What does the new loan pay off, and who lives in the property? A HELOC payoff generally makes it cash-out. Occupancy (primary, second home or investment) picks the leverage ladder.
2. Build income from deposits. The underwriter reads 12 or 24 consecutive months of statements and strips out what is not income.
3. Apply the expense factor. Business deposits are reduced before they count.
4. Test debt-to-income. Debt-to-income can run up to 50% through select programs.
5. Size the loan. The lender takes the lower appraised value, multiplies by the cash-out ceiling for that loan band, and subtracts the payoffs.
6. Check credit and overlays. Credit tier, housing payment history and the super jumbo overlays apply.
7. Confirm reserves. They must sit in separate liquid funds.
8. Clear title. The payoff letter, the closed HELOC and the recorded release must line up.
The HELOC payoff does not change how income is calculated. It changes classification, leverage and title. Keep that in mind, because borrowers often assume the opposite.
How Bank Statement Deposits Become Qualifying Income
Qualifying income is eligible deposits divided by the number of statement months, after an expense ratio. A bank statement file qualifies the person, not the property. Business statements need at least 25% ownership by the borrower. Statements must be consecutive, and a transaction history never substitutes for them.
| Deposit type | Treatment |
|---|---|
| Customer or client receipts | Counted, then reduced by expense factor |
| Transfers from your business to your personal account | Counted at 100% |
| Transfers between your own accounts | Removed |
| Loan proceeds and gifts | Removed |
| One-time windfalls, refunds, tenant security deposits | Removed |
| Large unexplained deposits | Removed until documented |
The expense factor follows the business. Through select programs, a service business with no employees takes 20%, a business with one to five employees takes 40%, and a business with six or more employees or any product business takes 50%. An accountant-provided ratio is an alternative. So is a profit-and-loss method capped at 80%. You do not pick the number yourself. The underwriter sets it from the business type and the accountant or P&L documentation.
Run it as a ratio. Say a business with a few employees takes the 40% factor. Sixty cents of every eligible deposit dollar then counts toward income, and that figure is what your debt-to-income test sees.
Twelve months and twenty-four months are not interchangeable. A 12-month window tends to favor rising income, because the strong recent months carry the average. A 24-month window tends to favor lumpy income, because a single slow stretch gets spread out. The bank portfolio program uses 12.
Deposit cleanup decides more bank statement files than the equity math does. Sort personal and business statements and flag every transfer before you apply.
Other paths exist when deposits do not tell the story. An asset allowance divides liquid assets by 36, 60 or 84 months to create supplemental or standalone income. An assets-only path needs U.S. liquid assets equal to the loan amount plus closing costs. Retirement accounts count at 70% (80% at age 59½ and over). Business funds, gifts and cryptocurrency never count.
Does Paying Off the HELOC Make This a Cash-Out Refinance?
Generally, yes. Across the network’s programs, retiring a HELOC makes the loan cash-out even when no money comes back to you. The narrow exception is a line that financed the same property’s purchase, with nothing drawn afterward.
| What the HELOC funded | Typical classification |
|---|---|
| This property’s purchase only, no later draws | May be treated as rate-and-term |
| Renovation or improvements | Cash-out |
| Debt payoff or personal spending | Cash-out |
| Another investment | Cash-out |
| Purchase plus any later draw | Cash-out |
Underwriters trace the draw history to sort a file into one of those rows. Expect to produce the line’s statements and explain what the money did. A zero balance does not rescue a line that was drawn for other uses.
This matters because classification sets the ladder. A file that looked like a simple refinance gets the lower cash-out ceiling, and that costs borrowing capacity. Many borrowers learn this late.
How the Payoff Eats Your Equity
Think of equity as one pool. The new loan must clear the first mortgage, then the HELOC, and only what remains is available as cash to you. Every point of value used to clear the line is a point you cannot take as cash.
The payoff figure is also not the statement balance. It includes accrued interest and fees, and interest accrues daily. Order a payoff letter early. It should show the full credit limit and the balance, carry a freeze-and-close instruction, and stay good through the funding date.
Now the ladder itself. These are cash-out ceilings on a primary residence through select wholesale programs, subject to full underwriting. The bands are loan amounts, never purchase prices, so compute your likely loan first, then read the row.
| Loan band | Program | Cash-out LTV, primary residence |
|---|---|---|
| $300K–$1M | Portfolio non-QM | 80% |
| $1M–$1.5M | Portfolio non-QM | 80% |
| $1.5M–$2M | Portfolio non-QM | 75% |
| $2M–$2.5M | Portfolio non-QM | 70% |
| $2.5M–$3M | Portfolio non-QM | 70% |
| $3M–$3.5M | Portfolio non-QM | 65% |
| $3.5M–$4M | Portfolio, super jumbo overlays | 65% |
| $4M–$5M | Bank portfolio, on review | 60% |
| $5M–$6M | Bank portfolio, on review | 55% |
| $6M–$10M | Bank portfolio, on review | 55% |
| $10M–$20M | Bank portfolio, on review | 50% |
| $20M–$30M | Bank portfolio, on review | 50% |
Second homes and investment properties run their own ladders. In some bands the ceiling matches the primary figure, and in others it sits well under it. Never estimate by subtracting from the primary row. Read the row for your occupancy.
Credit works inside each band. The top cell in a band needs a particular score. At $1.5 million to $2 million on a primary residence, the top cell needs 720 or better. A lower score takes a lower cell in the same band. The program floors are separate: 660 on the portfolio program up to the super jumbo line, 700 above it, and 680 on the bank program at every size.
Cash-out proceeds have their own limits. On the portfolio program, proceeds are unlimited at or below 60% LTV. Above 60%, cash in hand is capped at $1,500,000. The bank program publishes no cap. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Reserves: Why Proceeds Cannot Count Twice
Reserves run 3 months to $500,000, 6 months to $1,500,000 and 9 months above that, through select programs. Add 2 months per additional financed property, up to 12 months. First-time investors carry 12 months.
The super jumbo overlays begin above $3,500,000 on a primary residence and above $3,000,000 on a second home or investment property. At that size you need a 700 credit score, a 0x30x24 housing history and 48 months of seasoning after any credit event. You must be a U.S. citizen or permanent resident, with no non-occupant co-borrower. The property cannot be rural and is limited to ten acres. Most important here, cash-out proceeds cannot satisfy reserves. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
So picture three separate pools: funds to close, reserves, and cash to you. A borrower who plans to park the proceeds as the reserve cushion needs a different plan. Liquid assets have to sit outside the loan.
Pay Off, Subordinate, or Pay Down First?
You have more than one way to handle the line. Most files choose payoff.
| Path | Effect | Where it fits |
|---|---|---|
| Pay off and close at funding | Cleanest title; consumes equity | Most files |
| Subordinate the HELOC | Line stays open behind the new loan | Rare; lender can refuse |
| Pay the line down first | Smaller payoff at closing | Thin equity after payoff |
| Skip the cash-out refinance | Keeps current loans in place | When the ceiling leaves no room |
Subordination sounds attractive because it avoids a payoff. The HELOC lender controls that decision, though, and a refusal late in the process stalls the file. Thin equity after payoff leaves three honest options: a smaller ask, subordination, or walking away from the refinance. The stronger play is often the smaller ask. A borrower who needs cash and keeps the line open may find the HELOC more useful than the refinance. That is a genuine toss-up, and Lendmire’s comparison of a bank statement HELOC and a super jumbo cash-out walks through the tradeoffs.
Where the General Rule Breaks
- A zeroed line is still a lien. It sits on title until the line is formally closed and the release is recorded.
- The HELOC sits on a different property. That lien stays in place and needs its own plan.
- A DSCR loan can leave an LLC on title, subject to program terms.
- Texas home-equity loans under Section 50(a)(6). They take a 5-point LTV reduction and stop at $3,000,000 on the portfolio program.
- A recent purchase. Delayed financing can waive seasoning for a cash buyer, but the loan is still cash-out.
- Two programs, one size band. Between $4,000,000 and $6,000,000 both programs apply, with different statement windows, credit floors and cash-out caps.
- Condos and special property types. Warrantable condos run to 85% and non-warrantable to 80%. Condotels are 75% on a purchase and 65% on a cash-out, or 50% on the bank program.
Two appraisals are a lender overlay above $2,000,000 of loan amount, subject to underwriting. The values need not match, and the lower one usually sizes the loan. NerdWallet confirms that some jumbo lenders require more than one appraisal.
Declined files can still move. A bank statement file can help when rent did not cover the payment on a DSCR file but your deposits are strong. It does not help with a credit shortfall. Broker-side, this is the pattern: the file that fails on one ladder often fits another, which is why the same borrower can look different to different programs. Lendmire’s complete DSCR loans guide covers the property-income alternative.
Consumer or Business Purpose? Why Use of Proceeds Matters
A primary-residence cash-out is a consumer loan, so the lender must verify the income or assets it relies on using third-party records. The CFPB’s ability-to-repay rule says so, and financial institution records such as bank statements are a recognized source. A pure investment-property cash-out is typically business purpose. Cash used for personal spending can change that analysis, so the stated use of proceeds matters.
Documents That Keep the File Moving
Build the package before you apply:
- 12 or 24 consecutive statements, personal or business, with every large deposit explained.
- Ownership proof for any business account (at least 25%).
- The HELOC payoff letter with credit limit, balance, freeze-and-close instruction and funding-date validity.
- HELOC statements showing the draw history, plus a short use-of-proceeds explanation.
- Title history and the first-lien payoff.
- Proof of reserves in separate liquid accounts.
Files usually stall in four places: mixed personal and business statements, recent HELOC draws nobody can explain, a reserve shortfall once proceeds are excluded, and loan sizes that trigger case-by-case review. Fix those before submission and the underwriting sequence gets much smoother.
Frequently Asked Questions
Is a HELOC payoff with no cash back still cash-out?
Generally, yes. Retiring a HELOC that did not fund this property’s purchase makes the loan cash-out across the network’s programs, even when nothing comes back to you. The exception is a line that financed this same property’s purchase with no later draws. Some lenders treat that payoff as rate-and-term.
Can I keep the HELOC open instead of paying it off?
Only if the HELOC lender signs a subordination, which it can refuse. The new first lien needs first position. Most files choose payoff and closure. A zeroed line that is not formally closed still sits on title until the release is recorded.
Should I use personal or business statements?
It depends on where your income lands. Personal statements work when your business pays you directly. Business statements need at least 25% ownership and take the expense factor. Transfers from your own business into your personal account count at 100%, so a clean transfer pattern can make personal statements the stronger choice.
What triggers case-by-case review?
Every loan above $4,000,000 is reviewed case by case before submission, and any leverage figure at that size is a ceiling, not a promise. Unusual property types, thin reserves and credit events also draw closer review.
Is rate-and-term an option?
Only when no cash comes out and the HELOC falls under the purchase-money exception. A line that was drawn for renovation, debt or other uses makes the loan cash-out. In that case you are reading the lower cash-out column, and a smaller ask may be the better move.
Next Step
Lendmire is a broker that shops multiple wholesale programs, so the match depends on your situation. For a related occupancy question, see Lendmire’s piece on bank statement cash-out on a second home. Call 828-256-2183 to talk through your file.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
For current guidelines and terms, see Lendmire’s super jumbo bank statement loan programs page.
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 with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, 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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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. NerdWallet: Jumbo Loans — What You Need to Know
3. CFPB: Regulation Z § 1026.43, Ability-to-Repay
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: Best Super Jumbo Bank Statement Cash-Out Refinance Program Without an Escrow Account · Super Jumbo Bank Statement Cash-Out Refinance Requirements After One Year Self-Employed · Can You Get Approved for a Super Jumbo Bank Statement Cash-Out Refinance Through a Broker?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.