The Quick Read: Your cash equals the new loan amount, minus the payoff of every existing lien, minus closing costs and any reserves the lender requires, and the new loan is capped by the tightest of three limits: equity, income, and loan size. On a primary residence, select lenders in Lendmire’s wholesale network typically go up to 80% LTV on a cash-out with a fixed expense ratio, and the accountant-prepared route carries the lower ceiling.
- Primary residence cash-out: up to 80% LTV with a fixed expense ratio, or 75% with an accountant-prepared ratio.
- Second home cash-out: typically up to 75% LTV, depending on loan size and credit.
- Investment property cash-out: tops out around 75% LTV.
- Loan sizes generally run from $125,000 to $3,500,000, with reserves commonly around 6 months of the housing payment.
You own a house, your tax returns show modest income because of write-offs, and you want cash without selling. That is the exact borrower this loan serves. The rest of this article shows how to estimate your number, which limit decides it, and what shrinks it.
Key Terms Defined
LTV (loan-to-value) is the new loan divided by the home’s appraised value. A higher LTV means more borrowed and less equity left.
Cash-out refinance is a brand-new first mortgage that pays off your old one and hands you the difference. Corporate Finance Institute describes it the same way: the new loan replaces the old mortgage.
Bank statement loan is a mortgage that is reviewed around documented income taken from 12 months of business or personal bank deposits instead of tax returns.
Non-QM means the loan falls outside the standard “qualified mortgage” box. It is not a lesser loan. It simply uses a different way of documenting income.
Reserves are liquid funds you hold after closing, usually counted as months of the housing payment.
Seasoning is the waiting period between buying or acquiring a property and refinancing it.
How Is the Cash Actually Calculated?
The formula is simple arithmetic: appraised value times the maximum LTV, minus what you owe, minus costs. The result is your net cash, if equity is the limit that binds.
Walk through it in steps:
1. Apply the LTV cap. The cap depends on occupancy, credit, and loan size. More on that below.
2. Subtract every lien being paid off. That means the first mortgage, any second mortgage or HELOC, and any tax liens or judgments the title company finds.
3. Subtract closing costs and prepaids. A cash-out is a new first mortgage, so it carries full closing costs.
4. Set aside reserves if required. Some programs let part of the proceeds count toward reserves. That varies by program, so ask up front.
What lands in your account is what remains. The payoff goes to your old lender, and the rest is wired to you.
One trap deserves a flag. If you finance the closing costs into the loan, you do not lose the money, but you use up room under the LTV cap. That reduces the cash you can take. Paying costs out of pocket keeps more room, though it means bringing money to the table. Payoffs and costs are subtracted before you receive anything, so if they add up to more than the new loan, you would have to bring cash to closing.
What Are the Three Limits, and Which One Wins?
Three ceilings apply to every file, and the smallest one sets your cash. Equity is only one of them.
The equity limit. This is value times the LTV cap, minus payoff. Most people stop their thinking here.
The income limit. On a bank statement file, the lender converts your deposits into qualifying income. It applies an expense factor, and each lender sets its own. A fixed expense ratio is one route. An accountant-prepared ratio is another, and it carries the lower LTV ceiling on a primary residence.
Then the larger new payment has to fit inside that qualifying income. This is where cash gets trimmed. A bigger loan means a bigger payment, and the payment has to clear the income test.
The loan-size limit. Programs set minimum and maximum loan amounts. Across the network, loan sizes generally run from $125,000 to $3,500,000. Credit score and property type can also pull your cap lower.
Picture a borrower with plenty of equity but deposits that look thin after the expense factor. The equity ceiling says one number. The income ceiling says a smaller one. The smaller one wins, and that borrower takes less cash than the equity alone suggested. Now flip it: a borrower with strong deposits but a recent purchase and thin equity. Here equity binds, and extra income does nothing for the cash amount.
The practical lesson is to run both tests before you chase a number. Equity tells you what the house can support. Income tells you what you can support.
Does the Cash-Out Ceiling Change by Occupancy?
Yes. Occupancy changes both the leverage cap and the paperwork, so state which property you mean before you quote any number.
| Property | Cash-out ceiling | Notes |
|---|---|---|
| Primary residence | Up to 80% LTV | 75% with accountant-prepared ratio |
| Second home | Up to 75% LTV | Varies by loan size and credit |
| Investment property | Around 75% LTV | Select lenders; subject to guidelines |
Do not confuse these with purchase leverage. On a primary residence purchase or rate-and-term refinance, select lenders go up to 90% LTV. That ceiling does not apply when you take cash out. The same goes for an asset-depletion alternative, which is reviewed against liquid assets and runs to about 80% LTV on a primary residence. Treat those as separate programs, not as cash-out numbers. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The accountant-prepared route is worth a second look. It sounds like the more rigorous option, so people assume it earns more leverage. It is the opposite: the accountant-prepared ratio carries the lower ceiling, at 75%, while the fixed expense ratio reaches 80% on a primary residence.
Occupancy also decides the disclosure regime. An owner-occupied file, meaning a primary residence or second home, is a consumer mortgage and follows consumer disclosure rules. A bank statement loan on a non-owner-occupied rental, including a short-term rental, is a business-purpose loan and sits outside those consumer rules. If you want details on how investor loans differ, the complete DSCR loans guide covers the rental-property side.
Investment purchase leverage on bank statement documentation varies by lender, so treat any purchase figure you hear as a starting question, not an answer.
What Shrinks Your Cash?
Gross cash and net cash are different numbers, and the gap catches people off guard. Your net cash is always lower than the gross figure once payoffs and costs come out. Four things drive it.
Closing costs and prepaids. Every new first mortgage carries them. You can pay them in cash, take them out of proceeds, or finance them. Only the first option keeps your LTV room intact.
Other liens. A second mortgage, HELOC, or lien that title uncovers gets paid from proceeds. An old equity line you forgot about still has to be paid off, so check for one before you estimate your cash.
A low appraisal. Value is the base of the whole formula. If the appraisal comes in under your expectation, every downstream number shrinks. Value you added through renovation may not show up unless the appraiser sees the work and comparable sales that support it. Improvements may support a higher appraised value, depending on comps and underwriter review. Bring an itemized scope of work and before-and-after photos.
Reserves. Programs commonly want around 6 months of the housing payment held back. Whether proceeds can count toward that depends on the program.
Here is a quick side-by-side of how these play out. The scenarios use ratios and percentages only, since every file is underwritten individually.
| Scenario | Binding limit | What happens to cash |
|---|---|---|
| Large equity, strong deposits | Equity (LTV cap) | Cash set by value times cap, less payoff |
| Large equity, thin deposits | Income | Cash drops below the equity ceiling |
| Thin equity, strong deposits | Equity | Extra income adds nothing |
| Old HELOC still open | Equity | Payoff shrinks net cash |
The lender never asks what you wish the house was worth.
When Does Seasoning or a Recent Purchase Change the Answer?
Seasoning rules vary by lender and can change both whether you qualify for cash-out and how much you can take. Lenders set these individually, so ask before you plan around a date.
Two edge cases come up for owners who bought recently:
- Delayed financing. If you bought with cash, a few lenders will refinance soon after the purchase on terms closer to a purchase loan. Proceeds are generally limited to what you documented paying, and the borrower name must match the source of the purchase funds. Only some lenders offer it.
- Cost-basis treatment after rehab. Some programs treat a refinance that does not exceed your total cost basis (purchase price plus renovation plus holding costs) as a rate-and-term refinance rather than a cash-out. That can lift your leverage cap. It is not universal, and it is worth a direct question to your broker.
If you own the home free and clear, the payoff line disappears, and equity is simply value times the cap. That is the cleanest version of the formula.
How Do You Qualify the Income Side?
The file is reviewed on documented income under the applicable program, subject to lender guidelines. The lender reviews 12 months of business or personal statements and averages the deposits.
Then it applies an expense factor. Business accounts get a factor that reflects the cost of running the business. Personal accounts are treated differently. Each lender sets this factor, so do not expect one formula across the market.
Deposit quality matters. A clean, consistent account reads better than one mixed with personal transfers, loan proceeds, and one-time deposits. Those can lower the qualifying income figure.
Documents to gather before you apply:
- 12 months of statements for the account you want used, business or personal.
- A mortgage statement showing your current balance and any second liens.
- Homeowners insurance and tax information for the property.
- A business license or similar proof of self-employment if requested.
- Proof of liquid reserves.
Lenders are required to document that you can repay. The CFPB explains the ability-to-repay rule for consumer loans, which is why owner-occupied files still verify income, assets, debts, and credit. Statements are simply a different way to document it.
Bank Statement Loan, HELOC, or DSCR: Which One Fits?
The right tool depends on the property and how you earn. Here is how they differ structurally.
| Factor | Bank statement cash-out | HELOC | DSCR cash-out |
|---|---|---|---|
| Structure | New first mortgage | Second lien | New first mortgage |
| Income basis | Deposit averages | Varies by lender | Property rent vs payment |
| Best for | Self-employed owners | Keeping the first loan | Non-owner-occupied rentals |
| Cash-out ceiling | Varies by occupancy | Varies by lender | Around 75% on investment |
A HELOC leaves your first mortgage in place and adds a second lien. A cash-out replaces the first mortgage entirely. If you are happy with the existing loan, a second lien may make sense. If you need a larger sum or are consolidating, a new first mortgage is the more common route.
DSCR is the rental-property alternative. It compares the property’s rent to its payment and does not depend on your personal deposits. 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. If the property is a rental, the DSCR route may fit better than statements. Select lenders in the network also offer programs below a 1.00 coverage ratio, though leverage and terms adjust.
One appraisal note for rentals: lenders commonly order a rent schedule alongside the appraisal. Fannie Mae’s appraisal forms list names Form 1007 for one-unit investment properties and Form 1025 for two to four units. The DSCR market borrows those standard forms, but agency rules do not govern DSCR loans.
Should You Take the Maximum?
Usually not. The ceiling is the most you can take, not the amount you should take.
More cash means a bigger balance and a bigger payment. On a bank statement file, that payment has to clear your income test. On a DSCR file, it thins the coverage ratio. Either way, a larger draw leaves less margin if your income dips or a rental sits vacant.
The stronger play is usually the cash you have a job for. Consider an owner who plans to fund a down payment on a second property. The larger refinance payment then counts in the next approval, so each loan is underwritten on its own. Taking more than needed can quietly cap the next deal.
The right answer depends on your credit profile, the property, and what the money will do. Many borrowers consider whether the use of funds creates income or pays down costlier debt before sizing the draw. Tax treatment varies; consult a qualified professional.
Checklist: Before You Apply
A few moves can raise your cash or protect it:
- Clean up the deposit account. Route business income through one account and stop mixing in personal transfers.
- Choose your statement window deliberately. Twelve strong months beat a messy period you could have skipped.
- Pay down revolving debt. Lower monthly obligations help the income test.
- Confirm every lien. Pull your mortgage statement and check for a forgotten second.
- Decide how to pay closing costs. Cash keeps LTV room. Financing uses it.
- Prepare an improvement file. Itemized scope and photos help if renovation is part of the value story.
- Ask about reserves. Know whether proceeds count toward them.
A broker that shops several wholesale lenders can match your scenario to the program whose overlays fit it. The best program for your situation depends on occupancy, credit, loan size, and documentation. Lendmire is a mortgage broker, not a lender, so it arranges that comparison rather than making the loan itself.
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. Owner-occupied consumer mortgage licensing covers 16 states, and every file is subject to lender guidelines and is not a commitment to lend.
Frequently Asked Questions
Is there a standard dollar amount I can pull out?
No. The amount depends on appraised value, the LTV cap for your occupancy, your payoff, costs, and your qualifying income. Two owners with the same home value can walk away with very different cash.
Does the 90% LTV figure apply to a cash-out?
No. That ceiling applies to primary residence purchases and rate-and-term refinances through select lenders. On a cash-out, a primary residence typically tops out at 80% LTV, a second home at 75%, and an investment property around 75%.
Can I use the cash for anything?
Generally yes on an owner-occupied file, though lenders may question certain uses and the money is not restricted. Many borrowers use it for debt payoff, renovation, or a down payment on another property. Keep records of where the funds go.
What if my statements show strong deposits but my appraisal comes in low?
The low appraisal wins. Value is the starting point for the LTV calculation, so a lower value reduces the equity limit regardless of income. An itemized scope of work and photos can help if renovation value was missed.
Can I do this on a rental I own?
Often, but the better route may be a DSCR cash-out, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Bank statement documentation can also work on a non-owner-occupied rental, with leverage topping out around 75% LTV on cash-out.
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 bank statement loan programs page.
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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References
1. Corporate Finance Institute: Cash Out Refinance
2. CFPB: What Is the Ability to Repay Rule
3. Fannie Mae Selling Guide B4-1.2-01
This article is part of Lendmire’s bank statement loan program — full qualification details, guidelines, and scenarios live on the program page.
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.