The Quick Read: It depends on your equity and the property’s occupancy, not on the 1099 itself. The lender takes the appraised value, applies the cash-out leverage cap for that occupancy, subtracts your existing payoff and closing costs, and the remainder is your check, as long as your documented income supports the larger loan. Your income documents decide whether you qualify. They do not raise the ceiling.
- Cash to you is roughly (appraised value × cash-out cap) minus payoff minus costs.
- On a primary residence, the cash-out ceiling is up to 80% LTV, or 75% with an accountant-prepared expense ratio.
- On a second home or an investment property, the ceiling is typically up to 75% LTV.
- Bank statement files qualify on deposits. A 1099 program starts from gross 1099 receipts, which is a different product.
- A low appraisal or weak income can shrink the check before the cap does.
What Is a Bank Statement Cash-Out Refinance?
It is a refinance that replaces your current mortgage with a larger one and pays you the difference. The borrower is reviewed on documented income under the applicable program, subject to lender guidelines. Instead of tax returns, the lender reviews bank statements. Across the select wholesale lenders Lendmire works with, the standard is 12 months of business or personal statements. Market guides describe programs that look at 12 to 24 months, according to HousingWire’s non-QM guide.
The lender adds up eligible deposits and strips out transfers and other non-income items. It applies an expense factor, then divides by the number of months reviewed. The result is your qualifying monthly income. The expense factor is set by the lender’s program, not by you, and it varies from one program to the next. Business statements usually get a factor. Personal statements often get little or none, because the deposits are treated as after-expense.
Does a 1099 Change How Much Cash You Can Take?
No. A 1099 changes how your income is measured, not how much equity you can pull. Two separate products get blurred here.
A bank statement program starts from eligible deposits. The 1099 forms play, at most, a supporting role. A 1099 program starts from gross 1099 receipts, usually over one to two years. HousingWire’s guide draws the same line between the two. If no 1099s were issued to you, the 1099 program is not usable, but a bank statement program still works.
Self-employed borrowers with a lot of write-offs often show low income on a tax return. Deposit-based underwriting can show more of what actually moves through the account. It still cannot lift the leverage cap. A strong deposit history means the file qualifies for the loan size. It does not make that loan bigger.
How Is the Cash Calculated?
The math has four steps, and income only enters at the last one.
1. Appraised value. The appraisal sets the value. Every later number is built from it.
2. Apply the cash-out cap. Multiply that value by the maximum cash-out LTV for your occupancy. This is the largest new loan the program allows. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
3. Subtract the payoff. The new loan pays off the existing lien first. A property with no lien is still treated as a full cash-out refinance.
4. Subtract costs and holdbacks. Closing costs, prepaid items and any required escrows or reserves come off what remains. The balance is your net check.
Then the income test applies. The larger loan has to fit your qualifying income. On an owner-occupied file, that means a debt-to-income review that includes the new, larger obligation. A high cap does not help if the income cannot carry the loan. This is why two borrowers with the same equity can walk away with different checks.
What Does the Check Look Like in Practice?
Use percentages of appraised value, so the math stays clean. Assume the property appraises at 100 and your existing payoff is 50 percent of that value.
| Occupancy | Typical cash-out ceiling | Gross cash before costs |
|---|---|---|
| Primary, fixed expense ratio | Up to 80% LTV | About 30% of value |
| Primary, accountant-prepared ratio | Up to 75% LTV | About 25% of value |
| Second home | Up to 75% LTV | Up to about 25% of value |
| Investment property | Up to 75% LTV | Up to about 25% of value |
The accountant-prepared route has the lower ceiling, not the higher one. Ceilings on a second home depend on loan size and credit, and every figure is subject to lender guidelines. The 90% figure you may see for primary residences applies to purchases and rate-term refinances. It is not a cash-out number.
Now test an appraisal miss. If the same property appraises at 90 instead of 100, an 80% cap gives a maximum loan of 72. Subtract the 50 payoff and the gross cash is 22, not 30. A 10 percent appraisal miss cut the cash by more than a quarter. The payoff stays fixed while the cap moves, so any change in value falls entirely on your cash.
What Comes Off the Top Before You Get a Check?
Expect these deductions between the maximum loan and your net cash:
- Closing costs and lender or broker fees.
- Prepaid items such as insurance and property-tax setup.
- Escrow deposits where the program requires them.
- Any liens beyond the first mortgage that must be paid at closing.
- Reserves, which are a set cushion of liquid funds the lender wants you to hold after closing. Some programs let you document them from other assets rather than from the proceeds.
Loan amounts on these programs generally run from $125,000 to $3,500,000. A small loan with fixed fees leaves a thinner check than a large one.
Which Limit Binds First: Equity or Income?
Which limit binds first depends on the file. Equity binds when the payoff and the loan-to-value cap leave little room. Income binds when the payment on the larger loan outgrows your deposit-based income.
The same logic applies to rentals. Equity decides how much you can borrow. Rent or income decides whether the property supports that loan. A lender can cap a rental loan well below the leverage maximum if the rent is thin. Run both tests before you promise yourself a number.
How Does Occupancy Change the Rules?
Occupancy changes both the ceiling and the disclosure regime. Keep them separate.
Owner-occupied (primary residence or second home). This is a consumer mortgage, so TRID disclosures apply. Lenders must make an ability-to-repay determination and verify income with reliable third-party records. The CFPB’s small-entity compliance guide says income does not have to be salaried to count, and that self-employment income can be considered. Lendmire’s consumer mortgage operations cover 16 states, so owner-occupied availability follows that footprint.
Non-owner-occupied rental, including a short-term rental. These loans are business-purpose and exempt from TRID. The CFPB’s published rule text deems credit to acquire, improve or maintain non-owner-occupied rental property to be for business purposes. The exemption turns on the loan’s purpose, so it is not automatic for every property labeled an investment. Where it applies, the lender’s own guidelines govern. Short-term rental collateral is set by each lender’s guidelines, so confirm the ceiling and any rental-history requirement before you plan around it.
Bank statement availability on investment properties varies by lender. Investment purchase leverage on bank statement documentation also varies, so treat any single number you see online as that lender’s number only.
When Is DSCR the Better Route?
A DSCR loan is worth comparing whenever the collateral is a rental. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, so your deposits and expense factor are not the headline. A bank statement file on the personal side still ends in a debt-to-income test.
Programs below 1.00 coverage exist through select lenders in the network, but leverage and terms adjust. The complete DSCR loans guide walks through how that path works.
Key Terms Defined
- LTV (loan-to-value): The new loan amount divided by the appraised value.
- Cash-out cap: The highest LTV a program allows on a cash-out refinance for a given occupancy.
- Expense factor: A lender-set percentage deducted from business deposits to estimate real income.
- Payoff: The balance on your existing loan, which is repaid from the new loan before you get cash.
- Net proceeds: The check you receive after the payoff, costs, escrows and holdbacks.
What If the Cash Is Less Than You Expected?
Check the usual causes in this order:
- Appraisal came in low. Ask what comps were used and whether a reconsideration request is realistic.
- Income supports a smaller loan. Review which months and deposits were counted, and whether personal and business statements were mixed.
- Costs and escrows were larger than assumed. Ask for an itemized estimate before you rely on a number.
- The property type has a lower cap. Confirm which occupancy the file was submitted under, since the cap follows it.
- Seasoning applies. A recent purchase may need a minimum ownership period before cash-out is available, though an all-cash purchase may refinance sooner under delayed financing.
If the check is still short, a different documentation path or property-level qualification may change the answer. A mortgage broker that shops several wholesale lenders can match the scenario to a program. The best program for your situation depends on occupancy, credit profile, leverage need and documentation.
Next Steps
If you are self-employed and want to see how the numbers work, Lendmire can help you compare bank statement loan options based on your deposits, the property, credit profile, leverage, and your goals. Call 828-256-2183 or request a quote at Lendmire’s quote page. Lendmire is a mortgage broker, not a lender, and every file is underwritten individually.
This article is general information, not legal or tax advice. Tax treatment varies; consult a qualified professional such as an attorney or CPA about your own situation.
Frequently Asked Questions
Can I do a bank statement cash-out refinance with only 1099 income and no traditional personal-income documentation?
Yes, on a bank statement program. It is reviewed on documented income under the applicable program, subject to lender guidelines, using 12 months of statements in most network programs. The 1099 forms are not the income measure. Deposits are. If you want income measured from the 1099s themselves, that is a separate 1099 program.
Does the 1099 amount determine how much cash I get?
No. Equity and the program’s cash-out cap set the maximum loan, and income only has to support that loan. Higher documented income can help you qualify for a larger loan. It cannot push the loan past the leverage ceiling.
What is the cash-out ceiling for each type of property?
On a primary residence, it is up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio. On a second home, it is up to 75% LTV, depending on loan size and credit. On an investment property, it tops out around 75% LTV. These are typical ranges from select wholesale lenders, subject to lender guidelines.
Can the cash count toward my reserves?
It depends on the program. Reserves of roughly six months are a typical program parameter, and some lenders allow reserves from other assets rather than from the proceeds. Ask for the reserve rule before you assume the check covers it.
What if my 1099 shows lower income than my deposits?
That is a reason bank statement programs exist. They measure eligible deposits, then apply a lender-set expense factor. The result can differ sharply from tax-return income, and the exact factor depends on the lender’s program.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. 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. HousingWire – Non-QM loans guide
2. CFPB – Ability-to-Repay and Qualified Mortgage small entity compliance guide
3. CFPB – 12 CFR 1026.3, Exempt transactions
This article is part of Lendmire’s self-employed mortgage guides — full qualification details, guidelines, and scenarios live on the program page.
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.