The Quick Read: Usually less than most retirees expect: on the asset depletion path, a cash-out refinance on a principal residence, second home, or investment property tops out at 60% of the home’s appraised value, and the payoff, costs, and your qualifying income shrink the cash from there. The loan must also pass the debt-to-income test, which compares your monthly debts to your qualifying income. Programs differ, so every file is underwritten individually.
- Equity sets the first ceiling. Cash-out is capped at 60% loan-to-value (LTV) on the asset depletion path, through select programs and subject to underwriting.
- Income sets the second. Your assets become monthly income, and the bigger loan’s payment has to fit inside it.
- Proceeds never count as assets. Cash you pull out cannot be used to qualify.
- The other path is different. On the asset qualifier path, cash-out terms are set lender by lender and are not published, so ask before you apply.
- Rentals often point elsewhere. A retiree refinancing a rental may be better served by a DSCR loan.
Two Paths, Two Different Answers
Cash-out is possible on one path and unpublished on the other, so the first step is knowing which path you are on. A borrower is reviewed on one path at a time. Mixing them is a common source of confusion.
Across the wholesale network Lendmire works with, asset-based mortgages split into two structures:
- The asset qualifier path counts your eligible assets against the entire loan. If the usable total equals or exceeds the loan amount, you qualify on assets alone, and no employment or income is documented.
- The asset depletion path divides your usable assets by 60 months to create a monthly qualifying income. That income must then carry the housing payment and your other debts.
| Path | Cash-out leverage | What to confirm |
|---|---|---|
| Asset qualifier | Lender-set, not published | Whether the lender allows cash-out at all |
| Asset depletion, primary or second home | 60% LTV on a cash-out refinance | Payoff, costs, income test |
| Asset depletion, investment property | 60% LTV on a cash-out refinance | Occupancy eligibility, income test |
Why do online sources contradict each other? Some say cash-out is never allowed, others say it always is, and both are describing one product. Programs differ on whether cash-out is allowed, on occupancy, and on the leverage cap. Even the vocabulary differs: asset depletion, asset utilization, and asset qualifier are not identical products.
For comparison, the same file on the depletion path may reach up to 80% LTV on a purchase or rate-and-term refinance of a principal residence or second home, but only 60% on a cash-out. On an investment property, the figures are 65% on a purchase or rate-and-term refinance and 60% on a cash-out. The cash-out ceiling is the lowest number on the table. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The Two Ceilings: Equity and Income
Your cash is limited twice, and whichever limit is lower decides the outcome. One is the value of the home. The other is what your assets can support as income.
The equity ceiling. The maximum new loan is 60% of appraised value on a cash-out refinance on the depletion path. You subtract the payoff, closing costs, and any required reserves from that loan, and what remains is your cash. A retiree with a nearly paid-off home hits the equity ceiling last. One with a large balance hits it first.
The income ceiling. A larger loan means a larger monthly payment, and that payment runs through the debt-to-income test. Your assets produce the income. So a thin asset pool can cap the loan below the equity ceiling.
Which one binds first? A retiree with a big portfolio and a large mortgage balance usually hits equity first. A retiree with a modest portfolio and a home of high value and low balance often hits income first. You can tell by running both numbers before you ask for a quote.
How to Estimate Your Cash, Step by Step
Estimate it in six steps, in order. Each narrows the answer.
1. Inventory your assets. Gather statements for every account you might count. On the depletion path, lenders typically ask for statements covering an extended history plus a recent statement, and the exact requirements vary by lender and file.
2. Apply the percentages. Each account type counts at a set share of its balance (see the table in the next section).
3. Divide by 60. Usable assets divided by 60 months give monthly qualifying income.
4. Check the minimums. Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid when asset depletion is your only income source.
5. Size the loan at 60% of value. This is the equity ceiling on a cash-out.
6. Subtract the payoff and costs. What remains is your cash, if the new payment also fits your income.
Here is an illustration, labeled as such, since the lender’s own calculation governs. Say you hold $1,500,000 in securities, which count at 80% and equal $1,200,000. You also hold $300,000 in cash, which counts at 100%. Together that is $1,500,000 of usable assets. Divided by 60 months, this is $25,000 of monthly qualifying income. That income must then carry the new housing payment and your other debts through the debt-to-income test.
Now size the equity. Suppose the payoff on your home equals 35% of its appraised value. A 60% cash-out loan leaves about 25% of the value, before costs. That is arithmetic, not an offer. The final number depends on appraisal, credit, costs, and underwriting. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Loan size also has a range. The depletion path covers loans from $125,000 to $3,500,000, through select programs and subject to underwriting.
What Counts as an Asset, and How Much
Your cash is capped by your assets, so what counts matters. On the depletion path, each account type counts at a percentage of its balance.
| Asset type (depletion path) | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Private stock | 75% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
Several things do not count on this path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, non-vested restricted stock units, and funds from non-regulated financial companies. Cryptocurrency, precious metals, collectibles, and borrowed or pledged funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Equity in the home you are refinancing does not count as an asset. Cash-out proceeds never count either. This is a trap for retirees who assume the new cash will refill the pool.
The qualifier path counts differently. Brokerage, CDs, money market, and savings count at 100%, and a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. That path needs 60 days of seasoning and two months of statements per account. Here is the sanctioned shape: $330,000 in brokerage, $270,000 counted from a $300,000 401(k) under 59½, and $200,000 in savings produce $800,000 of usable assets, which can qualify an $800,000 loan on assets alone. The usable total must equal or exceed the whole loan, so a larger cash-out loan needs a larger pool.
Do You Have to Sell Anything?
No. Nothing is liquidated, and your portfolio keeps working. The lender models the income; it does not draw down your accounts.
Federal bank regulators describe the same idea. The OCC’s bulletin on asset dissipation underwriting explains that a lender uses assets to calculate a hypothetical annuity stream. The CFPB’s ability-to-repay compliance guide says a creditor may consider assets other than the dwelling securing the loan. It must verify the assets it relies on using third-party records. Neither source sets a divisor, a haircut, or a cash-out limit. Those are program choices, which is why the numbers above come from program guidelines and not from a rule.
Three Retiree Scenarios
These are percentage-based sketches, not offers. Each shows which ceiling binds.
| Retiree profile | Likely binding limit | What it means |
|---|---|---|
| Low balance, high equity, thin portfolio | Income | Cash may be less than the 60% cap allows |
| High balance, modest equity, large portfolio | Equity | Little cash after the payoff |
| Large portfolio, paid-off home | Neither tightly | Cash approaches 60% of value, minus costs |
Picture a retiree with a fully paid-off home and a solid portfolio. Here the 60% cap does most of the work, and the cash is simply the loan less costs. Contrast that with a retiree who owes a large balance. The payoff eats most of the 60%, and what is left may not justify the refinance.
For retirees with documented income such as Social Security or a pension, the asset-derived income can supplement it, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. That can change the math for a retiree with both a pension and a portfolio.
Credit, Seasoning, and Reserves
Credit on the asset qualifier path starts at a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs a 700 score. Housing history of 0x30x12 is the target, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
Reserves differ by path. The qualifier path requires none at or below 75% LTV, and above that the lender sets them. The depletion path publishes no reserve months. Because cash-out proceeds never count as assets, do not plan on the new cash serving as your reserves. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
When a Rental Calls for DSCR Instead
If the property you want to refinance is a rental, a DSCR loan may fit better than any asset-based path. 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.
The difference is what you qualify on. A DSCR file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your portfolio does not size the loan. A retiree with rentals, equity, and a big portfolio is therefore choosing between two qualifiers: personal assets or the property’s cash flow. For the full picture of how DSCR financing works, see Lendmire’s complete DSCR loans guide.
For a closer look at how an asset-rich retiree’s cash-out plays out on the asset side, see Lendmire’s piece How Much a Cash-Out Refinance Releases for an Asset-Rich Retiree. If a higher-priced home is involved, Lendmire’s article How Much Equity Jumbo Cash-Out Leaves an Asset-Depletion Retiree covers that tier.
Some asset-based programs are limited to principal residences and second homes, and agency rules are a separate matter. One practitioner overview notes that agency asset depletion guidelines are distinct from non-QM asset depletion. Do not assume one set of rules applies to the other.
Other Ways to Pull Cash Out
Asset depletion is one route, not the only one. A home equity line or loan, a reverse mortgage, a rate-and-term refinance, and selling investments each solve a different problem. Each program follows its own rules, and none of them follows this one’s.
- Home equity line or loan: usually reviewed on income, and it keeps your first mortgage in place.
- Reverse mortgage: its own age-based structure, with a different repayment profile.
- Rate-and-term refinance: no cash, but the leverage ceiling is higher (up to 80% on a principal residence or second home on the depletion path).
- Selling investments: the simplest option, but it removes assets that may be producing income and can trigger gains.
Borrowing against the home leaves the portfolio intact and still compounding. Selling gives up that growth. For some retirees that tradeoff matters more than any difference in the loan itself. Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
Asset depletion: a method that divides usable assets by 60 months to create a monthly qualifying income.
Asset qualifier: a path where eligible assets must equal or exceed the entire loan and no income is documented.
Cash-out refinance: a new loan larger than your payoff, with the difference paid to you.
Loan-to-value (LTV): the loan amount as a percentage of the home’s appraised value.
Debt-to-income (DTI): your monthly debts as a share of your monthly qualifying income.
Seasoning: how long funds have sat in an account before they count.
Questions to Ask Before You Apply
- Does this lender allow cash-out on my path, and at what leverage?
- Is my property type and occupancy eligible?
- How do you count each of my accounts?
- Does a cash-out loan change my minimum-assets test?
- Which statements must be on file, and how old can they be?
These five answers explain most of the difference between two quotes.
Frequently Asked Questions
Can a retiree take cash out on an asset depletion refinance?
Often yes, but only within limits. On the depletion path, cash-out is capped at 60% LTV for principal residences, second homes, and investment properties, through select programs and subject to underwriting. On the asset qualifier path, cash-out terms are set by the lender and are not published.
Do cash-out proceeds count toward my assets or reserves?
No. On the depletion path, cash-out proceeds never count as qualifying assets. The qualifier path publishes no cash-out figure, so ask the lender before you plan around it. Plan your qualifying assets as if the new cash were not there.
Do I have to sell stocks or empty a retirement account?
No. The lender calculates income from your balances and does not liquidate anything. Your accounts stay invested, and the income figure is a modeled number used only to test the loan.
Does my retirement account count in full?
Not on the depletion path, where retirement accounts count at 70% at any age. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. Each path has its own table, so never mix them.
What if I own rentals?
Then a DSCR loan may be the better tool, since it qualifies primarily on the property’s rental income covering the payment, subject to lender guidelines. Asset depletion is reviewed on your portfolio instead. Some retirees compare both before choosing.
Where to Go From Here
If you are qualifying on assets rather than income and want to see how the numbers work, Lendmire can help you compare asset-based mortgage options based on your statements, the property, credit profile, leverage, and your goals. Lendmire is a mortgage broker whose consumer lending is licensed in 16 states, and every program is placed through select lenders and subject to underwriting and not a commitment to lend. The figures above are ceilings and floors, never offers, and programs change.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving self-employed and high-net-worth borrowers in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
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References
1. OCC Bulletin 2019-36, Asset Dissipation Underwriting
2. CFPB ATR/QM Small Entity Compliance Guide
3. Gustan Cho, Freddie Mac Asset Depletion
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Meet Jumbo Loan Asset Depletion Requirements for an Asset-Rich Retiree · Asset Qualifier vs Asset Depletion for a Cash-Out Refinance · Asset Depletion vs Bank Statement HELOC for a Retiree
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.