The Quick Read: An asset-based mortgage is reviewed around what you own. A bank statement loan is reviewed around what your business deposits. The right choice depends on whether your strength is a large, seasoned balance sheet or steady cash flow that your traditional personal-income documentation understates.
- An asset-based mortgage has two paths. The qualifier path lets eligible assets cover the whole loan with no income documented. The depletion path turns assets into monthly income.
- A bank statement loan averages 12 to 24 months of deposits into income and usually asks about your business history.
- Both are non-QM (they sit outside standard agency guidelines), and both still document something. The only question is what.
- Everything below is subject to underwriting and lender guidelines. The figures are ceilings and floors, not offers.
Here is the honest answer. If your business runs strong cash through its accounts, but write-offs shrink your taxable income, a bank statement loan usually fits. If you sold a company, are between ventures, or hold a large portfolio with thin documented income, the asset-based route fits better. If you have both, the choice comes down to which side of your file reads cleaner to an underwriter. Lendmire is a broker. It places either loan through select lenders in its wholesale network and does not make the credit decision.
Side-by-Side
| Factor | Asset-Based (Lendmire network) | Bank Statement (industry norms) |
|---|---|---|
| Review basis | Eligible assets, or assets turned into income | Deposits averaged over 12 to 24 months |
| Income documented | Qualifier: none. Depletion: derived income | Deposit-derived income |
| Documents | Account statements for every qualifying asset | Personal or business statements, often a P&L |
| Business history | Not tested | Often expected |
| Property types | Primary and second home; investment on depletion only | Varies by program |
| Entity vesting | Individual borrower is typical | Individual is typical; varies |
| Reserves | Qualifier: none at or below 75% LTV | Set by each program |
The left column shows Lendmire’s network figures. The right column shows published industry norms, which differ from lender to lender. This table leaves out pricing on purpose, since each file prices on its own.
Key Terms Defined
Asset qualifier path: The path where eligible assets, after credit percentages, equal or exceed the entire loan. No employment or income is documented.
Asset depletion path: The path that adds up usable assets, divides by 60 months, and treats the result as monthly income. That income runs through the debt-to-income test.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Expense factor: The share of business deposits a bank statement lender subtracts as presumed business costs. Each lender sets its own.
Seasoning: How long funds have sat in your accounts before a lender counts them.
LTV: Loan-to-value, meaning the loan as a percentage of the property’s value.
When an Asset-Based Mortgage Is the Better Fit
An asset-based mortgage fits when your balance sheet is strong and your documented income is not. Think of a business owner who just sold a company, a founder between ventures, or an owner whose profits sit in a brokerage account rather than in payroll. You can pick the path that matches your situation, but you qualify on one path at a time.
The qualifier path asks whether your eligible assets cover the whole loan. Across the select programs we place files with, accounts count at these percentages:
- Brokerage, certificates of deposit, money market and savings count at 100%.
- Retirement accounts count at 90% under age 59½ and 100% at 59½ or older.
- Balances combine across accounts.
- Leverage runs up to 80% on a purchase and 75% on a refinance, on a principal residence or second home.
- Loans go up to $4,000,000.
- The credit floor is 600, subject to underwriting.
- Statements need 60 days of seasoning, and two months of statements for each account.
No employment or income is documented on this path. The assets are, though. Reserves are not required at or below 75% LTV, and above that the lender sets them. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The depletion path fits when you want assets to supplement income, or when you are buying an investment property. Credit percentages differ here:
- Cash and certificates of deposit count at 100%.
- Securities count at 80%.
- Private stock counts at 75%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
- Leverage reaches 80% on a purchase or rate-and-term refinance of a principal residence or second home, and 60% on a cash-out refinance of those same properties.
- On an investment property, leverage is 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
- Loan sizes run from $125,000 to $3,500,000.
Credit follows the lender’s score and loan-amount matrix. A first-time investor on this path needs a 700 score. Statements must be at least 120 days old at application, plus one within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
The depletion path also has minimum assets. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When assets are your only income source, you also need at least $250,000 in liquid funds. Asset income can supplement documented income up to a 45% debt-to-income ratio, and when it does, the minimum-assets rule is waived.
What does not count. The depletion path excludes 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 pledged or borrowed funds are not published as eligible on either path. Neither are business accounts beyond your ownership share. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender. A business owner should plan for this, because the company’s operating account is usually not your asset in the way your brokerage account is.
Owners who sold a company often ask about the next step. Lendmire’s piece Asset Depletion vs a New Bank Statement Loan After a Business Sale covers that situation from the deposit side.
When a Bank Statement Loan Is the Better Fit
A bank statement loan fits when your business is running, your deposits are strong and steady, and your assets are modest. It tests your cash flow rather than your portfolio. Trade press describes the product as using 12 to 24 months of deposits in place of tax-return income, and reports that non-QM now makes up about 5% of all mortgages, with bank statement programs among the growth areas.
Here is why it exists. A contractor, restaurant owner or consultant may deduct heavily, so the tax return shows a modest profit while the accounts show real money moving through. The lender totals eligible deposits, removes transfers and non-income credits, and averages the months. On business accounts, a lender then applies an expense factor. Personal accounts are often treated differently. The lender sets all of this, so two lenders can reach different income figures from the same statements.
The method is reviewed on documented income under the applicable program, subject to lender guidelines. Expect scrutiny on a few points:
- Large one-off deposits are excluded or must be explained.
- Mixed personal and business funds make deposits hard to sort.
- Wide month-to-month swings invite questions about consistency.
- A newly formed or recently changed business may lack the full statement history.
That last point is where the asset-based route often wins. A seasonal New Mexico business, such as a construction firm, a tourism operator or an agricultural supplier, may have uneven monthly deposits. A bank statement lender averages the months, so a strong summer can carry a slow winter, but a down year drags the average.
A bank statement file also runs through a debt-to-income test. Every financed property’s payment counts against your deposit-derived income. If you plan to keep adding properties, that ceiling arrives sooner than you expect.
A New Mexico Owner Run Through Both Paths
Run the numbers on a fictional New Mexico owner who runs a trucking company out of Albuquerque and wants to buy a primary home. Her tax return shows a thin profit after depreciation, but the business accounts show strong, steady deposits. She also holds a large securities portfolio she has never touched. This is an illustration, not a quote, and the lender’s own calculation governs.
Path one: bank statement. She submits 12 or 24 months of statements. The lender strips out transfers, averages the deposits, and applies its expense factor to the business account. The result is a qualifying income that runs through the debt-to-income test. Her strength is cash flow, and the file reads that way.
Path two: asset depletion. Say she has $1,500,000 in securities, which counts at 80%, or $1,200,000. She also holds $300,000 in cash at 100%. That is $1,500,000 usable. Divided by 60 months, it gives $25,000 of monthly qualifying income, which must then carry the housing payment and other debts through the debt-to-income test. Her strength is the balance sheet, and the file reads that way.
A qualifier-path example. Suppose a retiree wants an $800,000 loan. She holds $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). That counts $800,000 of usable assets and is reviewed on assets alone, subject to underwriting.
Which path should our trucking owner choose? That is a genuine toss-up. The bank statement path preserves her portfolio untouched in either case, but it makes her depend on a business with swings. The depletion path ignores the business entirely, though it leans on market-linked assets that can fall in value. Many owners ask a broker to run both and compare the two income figures before choosing. Neither path requires her to sell the portfolio.
What About a Rental Property?
If you are buying a rental rather than a home you will live in, neither loan is usually the first tool. 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. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. It generally does not stack your personal debt-to-income. If you want to hold title in an LLC, that is a DSCR feature, subject to lender program eligibility. A personal guaranty typically stays behind the entity. Lendmire’s complete DSCR loans guide walks through how that works.
The common investor split is simple. Use a bank statement or asset-based loan for the home you live in, and use DSCR for the rentals. The depletion path also allows investment property, but at lower leverage than a primary residence: 65% on a purchase or rate-and-term refinance and 60% on a cash-out.
What Lenders Still Check
Non-QM does not mean no-doc. Both products are consumer mortgages, so the lender must make a reasonable, good-faith determination that you can repay. The CFPB’s ability-to-repay rule lets the lender build its own underwriting method, and the Federal Register preamble lists the factors, which include income or assets, debts and credit history. That “income or assets” wording is why both methods fit. Bank statements show income. Asset depletion shows assets.
A common myth says a 43% debt-to-income cap applies to every loan. The rule itself sets no ceiling, so each program writes its own.
On deductions, tax treatment varies, so consult a qualified professional before relying on any of it.
The Verdict
Choose the asset-based mortgage if your documented income is thin, your business is new, sold or paused, or you hold a large portfolio that you would rather keep invested. Choose the bank statement loan if your business has strong, consistent deposits, you have the operating history, and your assets are modest. If you are strong on both, compare the two income figures side by side, because the better number may surprise you.
Neither loan is easy money. The asset-based route asks you to document and season large balances, and the depletion path sets minimum asset levels. The bank statement route asks you to explain every irregular deposit and holds your business history under a microscope. Lendmire’s consumer mortgage lending is licensed in New Mexico, and the program figures here do not change by state. 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. You can reach the team at 828-256-2183.
Frequently Asked Questions
Are an asset-based mortgage and a bank statement loan the same thing?
No. An asset-based mortgage tests what you own, either by letting assets cover the loan or by converting them to income. A bank statement loan tests what your accounts take in over 12 to 24 months. Both are non-QM and both document something, but they document different things.
Do I have to sell my investments to use asset depletion?
No. The assets are converted to income on paper, so you keep owning them. They must meet seasoning and eligibility rules, and eligible accounts count at the percentages above. Cash-out proceeds never count as qualifying assets.
Can I use my business account balance?
Often not directly. Business accounts beyond your ownership share are not published as eligible on either path. The documented route is moving funds into a seasoned balance in a regulated account that the lender can review.
Can I combine asset income with my documented income?
Sometimes. On the depletion path, asset-derived income can supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived. Whether a lender will pair deposit-derived income with asset income is a program question, so ask early.
Do I need two years of self-employment for either one?
Bank statement programs often expect an operating history, and the length varies by lender. The asset-based qualifier path does not test business history at all. Both depend on the property, credit profile and lender guidelines.
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. Scotsman Guide – One out of 20 mortgages are non-QM
2. CFPB – 12 CFR 1026.43, Ability-to-Repay
3. Federal Register – Ability-to-Repay and Qualified Mortgage Standards Final 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: Bank Statement Loan vs Asset Depletion Loan for Professional Athletes · Asset Depletion vs Bank Statement Loan After a One-Time Property Sale · Is an Asset Qualifier Mortgage Harder to Get Than an Asset Depletion Loan?
Guides: Asset-Based Mortgage in New Mexico
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.