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Mbanc NMLS #38232 | Equal Housing Opportunity Lender

How Cash-Out Refinance Works with Bank Statements

A cash-out refinance replaces your existing mortgage with a new, larger loan — and the difference between the new loan and the old balance comes to you in cash at closing. The bank statement loan makes this available to self-employed borrowers who cannot document qualifying income through conventional methods.

The income qualification process is identical to a purchase: 12 or 24 months of personal or business bank statements, income calculated from deposits, DTI verified against the new loan amount. The primary difference from a purchase is the LTV calculation — instead of calculating against a purchase price, it’s calculated against the appraised value of the property you already own.

Cash-Out Refinance LTV by State and Credit Score

Standard markets (no state overlay):
– 720+ credit, loan up to $2M: 80% LTV cash-out
– 700 credit, loan up to $2M: 80% LTV cash-out
– 680 credit, loan up to $2M: 75–80% LTV cash-out
– 660 credit, loan up to $1.5M: 75% LTV cash-out
– 640 credit, loan up to $1M: 70% LTV cash-out

State overlay markets (FL, IL, NJ, NY, CT):
Maximum 80% LTV for refinances, maximum $2,000,000 loan amount.

What Can You Do With the Cash?

Cash-out proceeds on bank statement refinances are unrestricted for most transactions. Common uses:

– Business capital injection
– Investment property down payment
– Debt consolidation
– Home improvement
– Reserves or liquidity building

Maximum cash-in-hand is unlimited on the Prime Ascent program for standard transactions. Note: investment property cash-outs are capped at $500,000 if LTV is above 65%, and $1,000,000 if LTV is below 65%.

The Equity You Need

For a cash-out refinance at 80% LTV, you need at least 20% equity in the property. At 75% LTV, you need 25% equity.

Example: Home appraised at $1,200,000. Current mortgage balance: $700,000.
Equity: $500,000 (41.7% equity).
At 80% LTV: New loan = $960,000. Cash out = $960,000 – $700,000 = $260,000.

How Cash-Out Proceeds Can Satisfy Reserves

A useful feature: cash-out proceeds from the new loan can be counted toward satisfying reserve requirements on the refinance. This means the money accessed through the cash-out can simultaneously serve as your post-closing reserves — you don’t need pre-existing liquid reserves separate from the cash you’re taking out.

Frequently Asked Questions

What is the maximum LTV for a bank statement cash-out refinance?

80% LTV in most states. In Florida, Illinois, New Jersey, New York, and Connecticut, the maximum is also 80% due to state overlays.

What is the maximum loan amount for a bank statement cash-out refinance?

Up to $4,000,000 in standard markets. $2,000,000 maximum in state overlay markets (FL, IL, NJ, NY, CT).

How is income calculated for a cash-out refinance using bank statements?

Exactly the same as for a purchase — 12 or 24 months of personal or business deposits, averaged with applicable expense factors. The fact that it’s a refinance rather than a purchase doesn’t change the income documentation methodology.

Is there a waiting period for a cash-out refinance?

On primary residences, there is no standard seasoning requirement for a cash-out refinance. For investment properties, confirm seasoning requirements with your loan officer.

Can I do a cash-out refinance on an investment property with bank statements?

Yes. Investment property cash-out refinances are available on the bank statement program. LTV limits are generally 70–75% on investment property cash-outs depending on credit score and loan amount.

About the Author

Mayer Dallal is the Managing Director of Mbanc (Mortgage Bank of California, NMLS #38232), a consumer-direct Non-QM lender specializing in bank statement loans, DSCR loans, and asset utilization programs for self-employed borrowers and real estate investors. Mbanc is licensed in 22 states for primary residence lending plus an additional 24 states and Washington DC for non-owner-occupied investment property financing under the business-purpose exemption.

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