The Quick Read: It depends on the path, but on the asset depletion path the new loan usually tops out at 60% of appraised value on a cash-out refinance, and your cash is whatever remains after the old mortgage and closing costs, provided your verified assets also produce enough qualifying income. The asset qualifier path is different: its cash-out terms are set by the lender and are not published.
- On the asset depletion path, a cash-out refinance on a principal residence, second home or investment property is capped at 60% of value, through select programs and subject to underwriting.
- Your assets decide whether you qualify. The appraisal and the leverage cap decide how big the loan can be.
- Cash-out proceeds never count as qualifying assets.
- A refinance with no cash taken out, called rate-and-term, allows more leverage on a residence.
What Actually Sets the Cash-Out Ceiling?
Two separate tests set the number, and the lower result wins. The first is collateral: the program’s maximum loan-to-value (LTV, the new loan as a share of the appraised value) sets the ceiling on the whole new mortgage. The second is qualification: your assets have to produce enough monthly income to carry the new payment and your other debts.
Most borrowers assume the second test sets the cash. It rarely does. A $3,000,000 portfolio can qualify you easily and still return modest cash on a home that already carries a large mortgage.
Across the wholesale network, the pattern is consistent. Assets answer “can you repay?” The house answers “how much can the lender secure against it?” Your cash comes out of the smaller of the two answers.
Key Terms Defined
Asset depletion: a method that divides your usable assets by 60 months to create a monthly qualifying income, which then runs through the debt-to-income test.
Asset qualifier: a method where eligible assets alone must equal or exceed the entire loan, with no employment or income documented.
Debt-to-income (DTI): your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Cash-out refinance: a new, larger mortgage that pays off the old one and hands you the difference.
Seasoning: how long funds must sit in your accounts, or how old your statements must be, before a lender will count them.
Haircut: the share of an asset’s balance a lender will not count, such as the 20% trimmed off securities.
Which Path Fits You?
Pick the path first, because the two never blend. A borrower is reviewed on one path at a time, and each has its own leverage, asset credit and paperwork. The table shows both through select programs, subject to underwriting.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How you qualify | Assets cover the whole loan | Assets become monthly income |
| Refinance leverage | Up to 75% | 60% cash-out; 80% rate-and-term on a residence |
| Cash-out terms | Set by lender, not published | 60% on residence, second home or rental |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Income documented | None | Derived from assets |
If you are a retiree or business seller with large balances and little documented income, the qualifier path is attractive when your assets exceed the loan. If your assets are big but not big enough to cover the loan outright, depletion turns them into income instead. Only depletion has published cash-out terms, so cash-out questions here center on it.
How the Cash Amount Is Worked Out
The arithmetic is simple, and it is subtraction. Start with the appraised value. Multiply by the cash-out cap, which is 60% on the depletion path for a principal residence, second home or investment property. That product is the largest new loan. Then subtract the payoff of your existing first mortgage, any second lien and closing costs. What is left is your cash.
Here is an illustration in percentages only. Say your current mortgage balance equals 40% of the appraised value. A 60% cap leaves roughly 20% of value before closing costs. Costs come out of that. If your balance is already at 55% of value, only a thin slice remains. If you own the home free and clear, the full 60% is on the table, subject to the other tests below.
The appraisal matters as much as any asset statement. A lower value shrinks the cap on every dollar of the loan. Equity you cannot prove through the appraisal does not exist for the lender.
Compare that with a refinance that takes no cash out. On a principal residence or second home, the depletion path allows up to 80% for rate-and-term, with the cap on investment property at 65%. Borrowers who only want a lower balance or a restructured loan get more room. Borrowers who want cash give up 20 points of leverage on a residence.
How Assets Become Qualifying Income
Depletion divides usable assets by 60 months. The usable figure comes after haircuts, which on this path are:
- Cash accounts and 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.
Run an illustration with the program’s percentages. Take $1,500,000 in securities, counted at 80%, which is $1,200,000. Add $300,000 in cash at 100%. Usable assets total $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 DTI test. The lender’s own calculation governs, and this is illustrative only.
Two minimums apply on this path. Qualified assets must reach at least the lesser of $1,000,000 or 1.25 times the loan balance. And when assets are your only income, at least $250,000 must be liquid. Asset income may also supplement documented income up to a 45% DTI, and when it does, the minimum-assets rule is waived.
Cash-out proceeds are the trap here. The money you pull from the house cannot be counted back toward qualifying. Plan your statements so the assets stand on their own.
Seasoning, Credit and Paperwork
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. The asset qualifier path asks for 60 days of seasoning and two months of statements per account.
On credit, the qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix of score and loan amount. A first-time investor on the depletion path needs a 700. Housing history is typically 0x30x12, though a single 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.
These loans are not paperless. They skip employment and income documentation, but the assets are documented in full. The federal ability-to-repay rule allows a lender to rely on assets other than the home that secures the loan, and it requires reasonably reliable third-party records for whatever the lender counts. Your equity in the subject property cannot be the repayment source. Your statements can.
What Changes for a Montana Homeowner?
The program figures do not change by state. A Montana borrower sees the same percentages, haircuts and minimums as anyone else, and Lendmire’s consumer mortgage lending is licensed in 16 states, Montana among them.
The real Montana friction is the appraisal. Rural parcels, acreage, cabins and resort-area second homes often have thin comparable sales. An appraiser working from sparse comps may land lower, and the 60% cap then bites harder. If your property is a lake or mountain retreat, expect the valuation to be the step that decides your cash.
Retirees and second-home owners are common in this lane, and both fit the framing well. The retiree usually has the portfolio but not the paycheck. The second-home owner has equity but may not want to sell investments in a down market.
When Cash-Out Is Off the Table
Not every asset-based program allows cash-out at all. Some exclude it, and some limit it. The asset qualifier path is the clearest example, since the lender sets its cash-out terms privately and nothing is published. Treat any qualifier-path cash-out amount you see quoted as a conversation with a lender, not a standard.
Agency loans are narrower still. Fannie Mae’s Selling Guide allows employment-related assets to count as income only on a purchase or a limited cash-out refinance, and only for a principal residence or second home. That is one agency’s rule for one asset type, and it does not govern the wholesale programs described above.
Many lenders also do not allow asset income to be combined with other income. Some allow pension, Social Security or rent to be added. Ask before you assume.
Where the Cash Goes Next
Many Montana homeowners pull cash to buy a rental. The cash can fund the down payment on an investment property, which is a sound use if you also weigh the extra payment on your home. A larger mortgage reduces your cash flow. A rental that covers its own costs can replace it, but that is a bet on the next property, not a certainty.
Once you own the rental, financing shifts lanes. A rental purchase or refinance under DSCR (debt service coverage ratio, the rent compared with the full monthly obligation) qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal assets are not the test. The complete DSCR loans guide walks through that route. Homeowners comparing the size of cash-out across programs may also want Lendmire’s piece on whether a homeowner can take cash out on a jumbo refinance.
Keep proceeds separate from your qualifying assets in your own bookkeeping. Tax treatment varies; consult a qualified professional.
Is Asset Depletion the Right Tool?
Sometimes another route fits better. Each has its own rules, attributed here to the program itself.
| Route | Best for | Reviewed on |
|---|---|---|
| Asset depletion | Large assets, little income | Assets divided by 60 months |
| Asset qualifier | Assets exceeding the loan | Assets alone |
| Bank statement | Self-employed with deposits | Documented deposits |
| DSCR | Rental properties | Property rent |
| HELOC | Keeping an existing first mortgage | The lender’s own rules |
If you want to keep your existing first mortgage, a HELOC (a credit line secured by your home) may suit you better than replacing the whole loan. If you are self-employed with strong deposits, bank statement income may carry the file with fewer asset requirements. And if your goal is a larger loan on a large house, Lendmire has a related piece on whether an equity-rich homeowner can take a large cash-out refinance.
Frequently Asked Questions
Can I take cash out on an asset depletion refinance in Montana?
Yes, on the depletion path through select programs, up to 60% of appraised value on a principal residence, second home or investment property, subject to underwriting. The qualifier path’s cash-out terms are set by the lender and are not published. Your cash is the new loan minus the old payoff and closing costs.
Do my assets get used up or sold?
No. The assets stay in your accounts. The lender counts them after haircuts to compute income, then divides by 60 months. You do need to keep them in place and documented through the process.
Can the cash I take out count toward qualifying?
No. Cash-out proceeds never count as qualifying assets on the depletion path. Qualification must rest on assets that were already seasoned in your accounts.
What credit score do I need?
The qualifier path publishes a 600 minimum. The depletion path follows the lender’s matrix of score and loan amount, and a first-time investor needs a 700. Every file is underwritten individually.
Does my Montana ranch or rural property qualify?
Property type and location are reviewed by the lender and appraiser. Rural parcels with thin comparable sales can appraise lower, which lowers the cash available at a fixed leverage cap. Program percentages stay the same either way.
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.
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
2. Fannie Mae Selling Guide B3-3.4-06, Employment-Related Assets as Qualifying Income
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 Do a Cash-Out Refinance on an Asset Depletion Loan? · How Much Can a Retiree Borrow on a Jumbo Loan Using Asset Depletion? · How Asset Depletion Income Is Calculated From Your Portfolio
Guides: Asset-Based Mortgage in Montana
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.