The Quick Read: It depends on the program, but on the asset depletion path the ceiling is 60% loan-to-value on a cash-out refinance, whether the home is a principal residence, a second home or an investment property. Cash to you is the appraised value times 60%, minus your payoff, minus other liens, minus any financed costs. Your assets do not raise that ceiling, but the income they produce must carry the larger payment, and if it cannot, the cash shrinks. All figures are ceilings, subject to underwriting.
- The asset depletion path caps a cash-out refinance at 60% loan-to-value on a principal residence, second home or investment property, through select programs.
- Home value, payoff and the ceiling set the maximum cash. Assets set whether the income test can support it.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- The asset qualifier path covers the whole loan with assets alone, but its cash-out terms are set by the lender and are not published.
- New Mexico adds no statutory cap on equity borrowing, so the program ceiling is what binds.
What Is the Ceiling, in Plain Terms?
The ceiling is a limit on the new loan, measured against the home’s appraised value. It is not a share of your equity. That distinction trips up many owners who say they want to pull out “80% of equity.”
Here is the arithmetic. Take the appraised value and multiply by 60%. Subtract what you owe on the current mortgage and any other liens. Subtract costs rolled into the new loan. What is left is your gross cash.
That is why the test is the whole new balance against value. A low appraisal can shrink or erase the cash.
Run it with percentages. Say your existing mortgage sits at 45% of the appraised value. The 60% ceiling leaves 15% of value as gross cash, before costs. If the existing loan is at 55%, you have 5% of value to work with. If it is at 60% or higher, there is no cash-out room at all.
A large portfolio does not raise that ceiling. It does not change the equity math. Its job is to produce enough qualifying income to carry the new payment, and that second test can still cut the cash down.
Two Paths, One at a Time
Across the wholesale network, asset-based mortgage programs split into two paths. A borrower is qualified on one path at a time. Mixing them is the first mistake on a file.
The asset qualifier path covers the entire loan with eligible assets and documents no employment or income. The asset depletion path divides usable assets by 60 months to produce a monthly qualifying income. That income carries the full housing payment and your other debts through the debt-to-income test.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How you qualify | Assets cover the whole loan | Assets ÷ 60 = monthly income |
| Income documented | None | Derived, tested against DTI |
| Cash-out terms | Set by lender, not published | 60% LTV ceiling |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
For the cash-out question, only the depletion path gives a published ceiling. If someone quotes you a qualifier-path cash-out figure, ask the lender in writing. Do not assume one.
How Asset Depletion Creates Qualifying Income
Asset depletion turns a balance sheet into income on paper. Nothing is sold, and nothing is pledged. Each account type counts at a set share of its balance.
| Asset type (depletion path) | Share that counts |
|---|---|
| Cash accounts | 100% |
| Certificates of deposit | 100% |
| Securities | 80% |
| Retirement accounts | 70% at any age |
| Real-estate equity | 60% |
Some assets do not count at all 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. Privately held stock is not eligible on either path. A founder’s route is a sale or buyout converted to a seasoned cash balance. Cryptocurrency, precious metals and collectibles are not published as eligible either. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender reviews the source.
Here is the sanctioned shape of the calculation. Say you hold $1,500,000 in securities, which count at 80%, or $1,200,000. You also hold $300,000 in cash at 100%. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the new housing payment and your other debts through the debt-to-income test. The lender’s own calculation governs, and this is illustrative only.
Statements matter here. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days. The assets are fully documented. Only the income is derived. For context, Fannie Mae’s selling guide applies its own rule that asset-based income must last until the asset is depleted or the loan matures. That is an agency rule, not this program’s.
Which Limit Binds First: Equity or Income?
Two tests run side by side. Most owners only think about the first.
The equity test. Value times 60%, minus payoff and liens. This sets the largest loan and the gross cash.
The income test. Derived monthly income against the new payment and your other debts. Cash-out raises the loan balance, so it raises the payment. If the derived income cannot carry that payment, the usable cash shrinks, even when equity is plentiful. So assets do affect your cash, but only through this test. They never lift the 60% ceiling.
Picture a retiree in Santa Fe with a home that has almost no mortgage, and a modest portfolio. The equity test allows a large loan. The income test may not. Assets are divided by 60, and a smaller portfolio produces a smaller income. That file is income-limited.
Now picture an Albuquerque owner with a large portfolio and a home that already carries a mortgage near the ceiling. Income is ample. Equity is the problem. That file is equity-limited.
Two further program minimums apply on the depletion path. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must also never fall below $250,000 liquid when asset depletion is the only income source. If you have documented income as well, asset-derived income can supplement it up to a 45% debt-to-income ratio, and then the minimum-assets rule is waived.
Here is the catch most owners miss. Cash-out proceeds never count as qualifying assets on the depletion path. You cannot take cash out and then count it to qualify. Plan the file as if the proceeds do not exist.
Does Asset Depletion Work on a Cash-Out? Clearing Up the Mixed Answers
Yes on some programs, no on others. That is why you see conflicting answers online. Programs differ in their rules, and each lender sets its own.
On the depletion path through select programs in the network, cash-out is allowed at 60% on all three occupancy types. On the qualifier path, the lender decides whether cash-out is allowed and at what leverage, and it is not published. A page that says never and a page that says up to 80% may both be describing real programs. They are different programs.
Occupancy matters too. Many asset-based products in the market are built for owner-occupied homes. The depletion path here also reaches investment property, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Leverage on a principal residence or second home is higher on a purchase or rate-and-term refinance, at 80%. Cash-out is 60% on either.
The no-income-test route is the qualifier path. Its leverage on a refinance is up to 75% on a principal residence or second home, and that is a refinance figure, not a cash-out figure.
New Mexico Specifics
New Mexico does not cap how much equity you can borrow. One New Mexico home equity explainer notes the state has no special limit, and leaves combined loan-to-value to lender underwriting and federal consumer rules. That is general orientation, not legal advice.
So the 60% depletion-path ceiling is a program rule, not a state rule. A New Mexico borrower sees the same program figures as anyone else. Lendmire’s consumer mortgage footprint covers 16 states, and New Mexico is one of them.
Practical points for your file: anyone on title will typically sign the loan documents. Your existing mortgage payoff will be confirmed in writing. The appraisal drives everything, and values can differ a lot between Santa Fe, Albuquerque and rural counties. This is a consumer mortgage, so TRID disclosures apply.
Cash-Out Versus the Alternatives
Cash-out is one of several ways to reach equity. The asset-based version fits a particular borrower: high balances, low documented income.
| Option | What it does | Fit for asset-heavy, income-light |
|---|---|---|
| Asset depletion cash-out refinance | Replaces your mortgage, adds cash | Strong, since it is reviewed on assets |
| HELOC or home equity loan | Adds a second lien | Usually asks for income |
| Selling investments | Frees cash without new debt | No debt, but can trigger taxes |
| Asset qualifier purchase or refinance | Assets cover the whole loan | Cash-out terms not published |
Replacing your existing mortgage means giving up its terms. If your current loan is one you like, a cash-out refinance is an expensive way to get cash. Selling investments avoids new debt but can create a tax bill. Tax treatment varies, so consult a qualified professional.
For borrowers who want cash from a rental, the usual answer is a different loan. A DSCR loan is a business-purpose investor loan, reviewed differently from an owner-occupied mortgage. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Asset depletion on an investment property is the narrower route, for owners whose rent coverage is thin but whose balance sheet is strong.
Where These Files Get Stuck
Most of the friction is documentation, not math. A few failure modes show up again and again.
- Stale statements. Depletion-path statements must be 120 days old at application plus one within 45 days. Files fail when the recent statement ages out mid-review.
- Ineligible account types. Custodial accounts, deferred compensation, stock options and privately held stock are not eligible on the depletion path. Borrowers count them anyway and the number collapses.
- Unseasoned deposits. Funds moved into an account recently need a documented source. Sale-of-business, inheritance and legal-settlement funds are excused from seasoning, but the paper trail still has to exist.
- Counting the proceeds. Cash-out proceeds cannot count as qualifying assets on the depletion path. Files built on that assumption get sent back.
- Low appraisal. The ceiling is a percentage of the appraised number. A low value reduces the cash, and it can erase it.
One more pattern from across the wholesale network: borrowers anchor on the asset total and ignore the haircuts. A portfolio that looks like $2 million can count for noticeably less once securities are taken at 80% and retirement at 70%. Run the haircuts first, then decide whether to apply.
Credit sits on the lender’s matrix for the depletion path, and a first-time investor needs a 700 score. Housing history is generally 0x30x12, and a housing event needs four years of seasoning. Multiple bankruptcies are not eligible. All of this is subject to underwriting.
Costs, Risks and Who This Is Not For
Costs reduce your net cash. Financed costs come off the ceiling the same way payoff does. Ask for the full cost picture before you commit, since it varies by file.
The larger risks are structural.
- Payment increase. The new loan is larger, so the payment is larger.
- Lost terms. You give up your existing mortgage’s terms.
- Market swings. Securities count at 80% and retirement accounts at 70%. If the portfolio drops between application and review, the qualifying income drops with it.
- Lower equity. Cash out means less equity left in the home. Lenders must also verify your ability to repay, a point the CFPB’s ability-to-repay rule lays out.
This route is not a fit if your assets sit mostly in ineligible accounts, if you have documented income that already qualifies, or if the existing mortgage is cheap and the cash is not urgent.
What to Prepare
Gather these before the file starts.
1. Two or more months of statements for every account you plan to use, current enough to meet the 120-day and 45-day windows.
2. A list of every account type, so haircuts can be applied before application.
3. Your current mortgage statement and payoff information.
4. Identification and credit authorization.
5. Source documentation for any large recent deposit.
The appraisal comes after that. Do not count the cash until the appraised value is in.
Key Terms Defined
Loan-to-value (LTV): the new loan balance divided by the home’s appraised value.
Asset depletion: a qualifying method that divides usable assets by 60 months to produce monthly income, without selling anything.
Asset qualifier path: a method where eligible assets must equal or exceed the entire loan amount and no income is documented.
Haircut: the share of an account’s balance that does not count toward qualifying assets.
Net cash: gross cash after financed costs have been subtracted.
Frequently Asked Questions
What is the maximum cash-out on an asset depletion refinance?
On the asset depletion path, the ceiling is 60% loan-to-value, whether the home is a principal residence, second home or investment property. Gross cash is value times 60%, minus payoff and liens. Loans run from $125,000 to $3,500,000. Everything is subject to underwriting and lender guidelines. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Do my retirement accounts count toward the assets?
Yes, but at a reduced share. On the depletion path, retirement accounts count at 70% at any age. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. Which path you use changes the result.
Can I count the cash-out proceeds toward reserves or qualifying assets?
No on the depletion path. Cash-out proceeds never count as qualifying assets there. Build the file on the assets you hold today. The qualifier path has no published reserve requirement at or below 75% loan-to-value. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Does New Mexico limit how much equity I can borrow?
Not by statute. A New Mexico equity guide says lenders and federal rules set the limits. In practice, the program’s 60% ceiling is what you work with.
What happens if my portfolio drops before approval?
Qualifying income drops with it. Securities count at 80% and retirement accounts at 70%, then the total is divided by 60. A lower balance means lower derived income, which can reduce the cash the file supports.
Next Step
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 broker arranging financing through select lenders in its network. This is not a commitment to lend.
New Mexico owners with large balances and little documented income can take cash out on the asset depletion path, but home value sets the dollars and the 60% ceiling sets how far equity can be tapped.
Lendmire’s asset-based mortgage in New Mexico page presents the program for New Mexico borrowers.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges bank statement, P&L-only, 1099-only and asset-based home financing in 16 states through wholesale lenders, on primary residences, second homes and investment properties. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B3-3.1-01: General Income Information
2. TopMoneyHub: Home Equity Loan in New Mexico
3. CFPB: Ability to Pay Qualified Mortgage Rule
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Refinance a Tennessee Home on Assets When Your Income Stops? · Can a New Mexico Retiree Get a Mortgage on Savings and Investments Alone? · How Much of a Brokerage Account Counts Toward a North Carolina Asset Qualifier Mortgage?
Guides: Asset-Based Mortgage in New Mexico
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.