The Quick Read: On the asset depletion path, a Colorado homeowner can typically take out a new loan of up to 60% of the home’s appraised value on a cash-out refinance, minus the payoff of existing liens and closing costs, subject to underwriting. Your asset pool decides whether you qualify, not how much cash comes out. Loan-to-value and your current mortgage balance set the proceeds.
- Asset depletion cash-out tops out at 60% loan-to-value on a principal residence, second home or investment property, through select programs.
- Eligible assets divided by 60 months become your qualifying income, which must carry the new payment.
- Cash-out proceeds never count as qualifying assets.
- Whether a cash-out is allowed on the asset qualifier path is set by the lender and is not published, so no figure applies there.
- Colorado changes none of these program figures.
What Is the Maximum Cash-Out on an Asset Depletion Refinance?
Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The ceiling is 60% of appraised value, and you only see what is left after payoffs. Across the wholesale network behind Lendmire, the asset depletion path allows up to 80% on a purchase or rate-and-term refinance on a principal residence or second home. Cash-out drops to 60%. On an investment property the leverage is 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
The formula is simple. Appraised value times the cash-out limit gives your maximum new loan. Subtract your existing mortgage and any other liens, then subtract closing costs. What remains is your cash. Loan amounts on this path run from $125,000 to $3,500,000, subject to underwriting.
Consider a Colorado home appraised at $1,000,000 with a $400,000 mortgage. At 60%, the maximum new loan is $600,000. After the payoff, the gross cash is $200,000, before closing costs. A home with a larger existing balance leaves less. A home with no mortgage leaves the full amount. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Which Path Fits You?
Lendmire arranges two asset-based paths, and a borrower is reviewed on one at a time. Name the path before you read any number.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Divided by 60 months into income |
| Income documented | None | Derived income, run through DTI |
| Purchase leverage | Up to 80% | Up to 80% (65% investment) |
| Refinance leverage | Up to 75% | 80% rate-and-term, 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Cash-out | Lender-set, not published | 60% LTV |
If you want the most cash, the table makes the tradeoff plain. On a refinance, the qualifier path tops out at 75%, which sits below the depletion path’s 80% on a rate-and-term, and cash-out on the qualifier path is set by the lender and not published. The depletion path publishes 60%. Ask which path allows cash-out on your specific file before you plan around any number.
Why a Bigger Portfolio Doesn’t Mean a Bigger Check
Assets pass the qualification test. Equity sets the proceeds. A large portfolio raises your derived monthly income, which helps the new, larger payment clear the debt-to-income test. It does not raise the 60% ceiling.
That means two ceilings apply. One is the equity ceiling: value times 60%, less liens. The other is the income ceiling: can derived income carry the bigger payment? A retiree with modest equity and a huge portfolio hits the equity ceiling first. A homeowner with deep equity and thin liquid assets may hit the income ceiling, or fail the minimum-assets test.
Here is the depletion arithmetic. Say you hold $1,500,000 in securities, which counts at 80% for $1,200,000, plus $300,000 in cash at 100%. That is $1,500,000 usable. Divided by 60 months, it is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test. The lender’s own calculation governs, and this is illustrative.
Which Assets Count, and for How Much?
On the depletion path, each asset gets a haircut before the 60-month division.
| Asset | 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% |
Not eligible 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 and collectibles are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
One rule trips people up. Cash-out proceeds never count as qualifying assets, and assets used for income cannot also fund your closing costs. Plan the liquidity so both jobs are covered.
Minimums, Credit and Seasoning
Depletion-path files need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income, you also need at least $250,000 liquid. Asset-derived income can instead supplement documented income up to a 45% debt-to-income ratio, and when it does, the minimum-assets rule is waived.
Credit follows the lender’s score and loan-amount matrix. A first-time investor on this path needs 700. Housing history is 0x30x12, though 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.
Documentation is strict. Statements must be at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning. No income documentation never means no documentation. Your assets are verified with account records, and while the file does not require traditional personal-income documentation, pay stubs or employment verification, it is still fully underwritten.
Does Colorado Change the Answer?
Not the program figures. The 60% limit applies the same way to a Denver condo, a Boulder single-family or a mountain second home. Lendmire’s consumer lending is licensed in Colorado, among 16 states, and the program is placed through select lenders in its network.
State-law limits on home-equity borrowing, if any, are worth confirming with a Colorado attorney before you rely on them. What matters in practice is the appraisal. In a high-value county, a 60% limit on a large appraisal can still produce a meaningful loan, but a jumbo-sized balance changes how lenders review the file.
The federal ability-to-repay rule, found in Regulation Z, 12 CFR 1026.43, applies to non-QM loans too. The CFPB’s 2016 small-entity compliance guide lists eight underwriting factors, and the first is current or reasonably expected income or assets, excluding the value of the property that secures the loan. That is why a lender may rely on assets, and why it must still verify them.
What Shrinks Your Net Cash
Four things reduce the check:
- Payoff of the first mortgage and any second lien or HELOC.
- Closing costs, which come out of proceeds.
- A lower appraisal than you expected, since value sets the ceiling.
- Liquidity you must keep in place because those assets are counting toward qualification.
Taking the maximum also thins your margin. A bigger payment against derived income leaves less cushion if markets fall and your portfolio shrinks. Skip the maximum if you only need part of it.
Asset Depletion Versus the Alternatives
Asset depletion fits when your balance sheet is strong and your paycheck is not. Other programs fit other borrowers, and each follows its own rules.
For a rental, the alternative is a DSCR cash-out. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and it needs no asset test. If your home is your residence, asset depletion is the one that tests you rather than the property.
A bank statement loan is for borrowers who document income with deposits. A HELOC or second lien leaves your first mortgage untouched, which matters if your existing loan is cheap to keep. Compare the total cost, not just the cash.
The 60% cash-out limit is lower than the 80% purchase limit. Borrowers who do not need cash may do better on a rate-and-term refinance, where the limit is 80% on a principal residence or second home. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Who This Fits
- Retirees living on a portfolio, with a large balance and little reported income.
- Business sellers holding sale proceeds in a regulated account.
- Heirs or settlement recipients with large, recent balances.
- Early-retired professionals whose income stopped but whose assets did not.
It fits less well if your equity is thin, your liquid assets are below the minimums, or most of your wealth sits in ineligible holdings.
Key Terms Defined
Asset depletion: A method that divides usable assets by 60 months to create monthly qualifying income.
Asset qualifier: A path where eligible assets must cover the entire loan, with no income documented.
Haircut: The percentage of an asset’s balance that counts after the lender discounts it.
Cash-out refinance: A new, larger loan that pays off your old one and gives you the difference in cash.
Loan-to-value (LTV): The loan amount divided by the home’s appraised value.
Frequently Asked Questions
What is the maximum LTV for cash-out on an asset depletion refinance?
It is 60% on a principal residence, second home or investment property on the depletion path, through select programs and subject to underwriting. Purchases and rate-and-term refinances allow more. The asset qualifier path does not publish a cash-out figure.
Can I use my cash-out proceeds to qualify?
No. Cash-out proceeds never count as qualifying assets on the depletion path. Your eligible assets must meet the program’s minimums before the loan, and assets used for income cannot also fund closing costs.
Will I have to sell my investments?
No. Depletion is a qualifying convention, not a withdrawal. You keep the accounts, and the property, not the assets, secures the loan. The lender does require statements to verify ownership and balances.
Does Colorado cap how much equity I can borrow?
State-law limits on home-equity borrowing can affect a cash-out loan, so confirm how they apply to your situation with a Colorado attorney. The program’s 60% cash-out limit applies regardless of state. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Should I use asset depletion or a DSCR cash-out on a rental?
It depends on which lens favors you. Asset depletion tests your balance sheet, while a DSCR loan tests the property’s rent against its payment. If the rent covers the payment comfortably, DSCR avoids the asset test entirely.
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 programs based on your statements, the property, credit profile, leverage, and your goals. For many Colorado borrowers with deep portfolios and moderate equity, the equity ceiling is the number that sets the check.
Lendmire’s asset-based mortgage in Colorado page presents the program for Colorado 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. CFPB Regulation Z, 12 CFR 1026.43
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 Buy Out an Ex-Spouse With an Asset Qualifier Refinance? · Asset Qualifier vs Asset Depletion for a Virginia Retiree · Asset Depletion vs DSCR for an Ohio Rental Purchase
Guides: Asset-Based Mortgage in Colorado
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.