The Quick Read: The right program is the one that matches where your wealth sits: eligible assets that cover the whole loan on the asset qualifier path, or eligible assets converted into monthly income on the asset depletion path. Neither path uses tax returns, pay stubs or employment verification, but every file is fully underwritten and every asset is documented with statements. Lendmire is a mortgage broker, so it places these files with select lenders in its network rather than lending directly.
- Asset qualifier path: eligible assets must equal or exceed the entire loan, and no employment or income is documented.
- Asset depletion path: usable assets divided by 60 months become qualifying income, which then runs through a debt-to-income test.
- Cash-out leverage: the depletion path publishes 60% loan-to-value on a cash-out refinance for a principal residence, second home or investment property. The qualifier path leaves cash-out leverage to the lender.
- Proceeds don’t count: the balance sheet has to carry the loan before the cash arrives, because cash-out proceeds never count as qualifying assets.
What an Asset-Based Cash-Out Refinance Actually Is
An asset-based cash-out refinance replaces your current mortgage with a larger one and returns the difference as cash. The borrower is reviewed on documented assets rather than paycheck-style income. It fits households with large balances and thin documented income: retirees, people who have sold a business, inheritance or settlement recipients, early-retired professionals and families living off a portfolio.
The phrase “asset-based” covers two different underwriting methods. Lendmire’s asset-based mortgage programs are built around both, and a borrower is qualified on one path at a time. The two tables never blend, so every figure here names its path.
No single program wins for every borrower. The right answer depends on your liquid balances, the property, your credit profile and how much cash you want out. A broker that shops several wholesale lenders can match those facts to a program. A single lender can only show you its own.
Key Terms Defined
- Asset qualifier path: the method where eligible assets, after the credit percentages, must equal or exceed the whole loan amount.
- Asset depletion path: the method that turns usable assets into a monthly qualifying income by dividing them by 60 months.
- Haircut: the share of an asset’s balance that is left out because the asset is less liquid or less certain.
- Seasoning: the length of time funds must sit in an account before they count.
- Cash-out refinance: a new, larger mortgage that pays off the old one and returns the difference to you.
- Debt-to-income test: the comparison of your monthly debts, including the new housing payment, to your qualifying income.
How Underwriting Treats Your Assets, Step by Step
Underwriting starts with a balance sheet, not a pay stub. Each step below is where a file either holds together or stalls.
1. Pick the path. If your eligible assets can cover the whole loan, the qualifier path is available. If they cannot, or if you want the cash-out leverage the depletion path publishes, you look at depletion.
2. List every account with its statements. Statements show the owner, the balance and the history. Missing pages can stall a file, so include every page of every statement.
3. Apply the credit percentages or haircuts. Each asset type counts at a share of its balance, and the table below shows those shares.
4. Check seasoning. The qualifier path wants 60 days of seasoning and two months of statements for each account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days.
5. Size the loan against value. Leverage limits apply to the appraised value and the transaction type, so cash-out sits lower than a purchase.
6. Run the path’s test. On the qualifier path the test is assets against loan amount. On the depletion path it is qualifying income against the full housing payment and other debts.
7. Review credit and housing history. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix. A first-time investor on the depletion path needs a 700 score. Housing history is reviewed at 0x30x12, and one 30-day late in the last twelve months is considered case by case.
The Office of the Comptroller of the Currency describes asset depletion underwriting as using an applicant’s assets to calculate a hypothetical cash annuity stream. That bulletin is guidance to banks and does not set the divisor for these programs. The 60-month divisor here comes from the program’s own guidelines.
Two Paths Side by Side
The paths answer different questions. The qualifier path asks whether your assets cover the loan. The depletion path asks whether your assets, converted to income, carry the payment.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Assets cover entire loan | Assets ÷ 60 months = income |
| Income documented | None | Derived from assets |
| Debt-to-income test | Not run on income | Yes |
| Loan amounts | Up to $4,000,000 | $125,000–$3,500,000 |
| Purchase leverage | Up to 80% | Up to 80% primary or second home; 65% investment |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term on primary or second home |
| Cash-out leverage | Set by lender, not published | 60% on all three property types |
| Credit | 600 minimum | Lender’s matrix |
| Seasoning | 60 days; two months of statements | Statements 120 days old plus one within 45 days |
The qualifier-path leverage figures apply to a principal residence or second home. Investment property is available only on the depletion path, where the loan is business-purpose. All figures are ceilings and floors through select programs and are subject to underwriting.
The qualifier path does not publish a cash-out figure, so the lender decides whether cash-out proceeds are allowed and at what leverage. A borrower who wants a firm cash-out ceiling should plan around the depletion path. A borrower whose assets exceed the new loan balance may still prefer the qualifier path and ask about cash-out on that file.
What Counts, and What Doesn’t
Net worth and qualifying assets are two different numbers. A borrower with a large net worth can have far less usable balance once ineligible holdings and haircuts come off.
| Asset | Qualifier Path Counts | Depletion Path Counts |
|---|---|---|
| Brokerage accounts / securities | 100% | 80% |
| Cash, savings, money market | 100% | 100% (cash accounts) |
| Certificates of deposit | 100% | 100% |
| Retirement accounts | 90% under 59½; 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Accounts combine on both paths. Under the depletion path, these are not eligible: 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, business accounts beyond your ownership share, and pledged or borrowed funds 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 lender reviewing the source.
Privately held company stock is not an eligible asset on either path, at any percentage. A founder or shareholder instead documents liquid assets, such as seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their haircuts. Sale-of-business, inheritance and legal-settlement funds are excused from the depletion path’s seasoning rule.
Two Hypothetical Balance Sheets
These figures are illustrative, and the lender’s own calculation governs.
Qualifier path. Picture a borrower seeking an $800,000 loan. She holds $330,000 in brokerage accounts (counted at 100%, so $330,000), $300,000 in a 401(k) while under 59½ (counted at 90%, so $270,000) and $200,000 in savings (counted at 100%, so $200,000). That counts $800,000 of usable assets, which equals the loan, so the file is reviewed on assets alone, subject to underwriting.
Depletion path. Now take a borrower with $1,500,000 in securities and $300,000 in cash. The securities count at 80%, which is $1,200,000, and the cash counts at 100%, which is $300,000. That is $1,500,000 usable, and dividing by 60 months gives $25,000 of monthly qualifying income. That income must then carry the full housing payment and other debts through the debt-to-income test.
The depletion borrower would also check the minimum-assets rule. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when depletion is the only income source. If asset-derived income only supplements documented income, it can do so up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Where the General Rule Breaks
Rules of thumb fail in a few predictable places.
Investment property. A high-net-worth investor holding a rental often assumes the property’s rent will qualify the loan. That is the DSCR route, which is business-purpose rental financing. On the asset depletion path, an investment property is also a business-purpose loan, with 65% leverage on a purchase or rate-and-term refinance and 60% on a cash-out. The question becomes whether you want rent or your balance sheet to carry the file. Rent-qualified loans are a separate product, and their figures are not this program’s figures.
Business-purpose treatment has a regulatory basis. Regulation Z treats credit extended to acquire, improve or maintain non-owner-occupied rental property as business-purpose, and the rule text is mirrored at Cornell Law School’s Legal Information Institute. The exemption turns on the purpose of the loan, not just the label.
Primary residence and second home. These loans are consumer mortgages, so standard consumer disclosures apply. This is where asset-based underwriting fits best for borrowers whose taxable income looks small next to their wealth.
Retirement accounts. The qualifier path counts a 401(k) or IRA at 90% before age 59½ and 100% after. The depletion path counts retirement accounts at 70% at any age. A borrower with most wealth in retirement accounts may find the qualifier path more efficient after 59½, but the path’s cash-out limits matter just as much.
Credit events. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
Large concentrated holdings. Wealth in privately held stock, crypto, collectibles or business accounts looks large on paper but counts for nothing until it is converted to seasoned cash. The conversion plan can matter as much as the loan program.
Cash-Out Versus Other Ways to Raise Liquidity
Cash-out is one tool among several. The comparison below describes each tool’s general behavior, not this program’s rules.
| Option | Strength | Tradeoff |
|---|---|---|
| Asset-based cash-out | One fixed structure; reviewed on assets | Lower cash-out leverage; assets must be documented |
| Selling securities | No new debt | May trigger tax and give up market exposure |
| Home equity line | Flexible draws | Variable use of equity; separate qualification |
| Securities-backed line | Keeps portfolio invested | Tied to market values |
| Bank statement loan | Reviewed on deposits | Built for borrowers who document income with deposits |
| Rent-based cash-out (DSCR) | Property-level qualification | Business-purpose rental property only |
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
The Investor Decision in Practice
Start with where your wealth sits and what you want the cash to do.
- Liquid balances equal or exceed the loan amount: the asset qualifier path is the first place to look, since no income is documented and the 60-day seasoning rule is short.
- Wealth is large but falls short of the whole loan: the asset depletion path converts those assets into income, with the 60% cash-out ceiling as the trade.
- Wealth is mostly in a business or private shares: convert part to seasoned cash before applying, because the stock itself does not count.
- You want to hold a rental: compare the depletion path’s 60% cash-out limit with a rent-qualified route, and decide whether the property or the portfolio should carry the file.
- You need maximum cash: a lower-leverage cash-out may leave less than a sale or a credit line would, so run that comparison first. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
On reserves, the qualifier path requires none at or below 75% loan-to-value, and above that the lender sets them. The depletion path publishes no reserve months. Lender overlays still apply.
What to Prepare Before You Apply
A strong file is built from statements, not stories. Gather these before a lender review:
- Two months of statements for every qualifying account on the qualifier path.
- Statements at least 120 days old plus one dated within 45 days on the depletion path.
- A written trail for any large deposit, such as a sale, inheritance or settlement.
- Credit and housing history that fits the 0x30x12 standard.
- A short note on how you plan to use the proceeds.
Lendmire’s consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. A broker that shops multiple wholesale lenders can compare how each treats your asset mix, which a single lender cannot do.
Frequently Asked Questions
Does an asset-based cash-out refinance mean no documentation?
No. Every file is fully underwritten, and every qualifying asset is documented with statements. What drops out is the employment and income paperwork: no traditional personal-income documentation, pay stubs or employment verification are used. Credit, property value, leverage and housing history are still reviewed, subject to lender guidelines.
Do I have to sell my investments to qualify?
No. The depletion path converts usable assets into hypothetical income, but it does not require you to sell them. The qualifier path simply counts them toward the loan amount. The assets stay in the account, though they must remain there through underwriting.
Does privately held company stock count as an asset?
No. Privately held company stock is not an eligible asset on either path. A founder’s route is documented liquid assets: seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their haircuts. Planning that conversion early keeps the file clean.
Can I take cash out on the asset qualifier path?
It depends on the lender. The qualifier path publishes up to 75% on a refinance for a principal residence or second home, but whether cash-out proceeds are allowed, and at what leverage, is set by the lender and is not published. The depletion path publishes 60% on a cash-out refinance.
Is this only for retirees?
No. Retirees are common borrowers, but so are people who have sold a business, received an inheritance or settlement, retired early, or live on a portfolio. The shared profile is large balances and low documented income. The program parameters are ceilings and floors, not offers.
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 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.
For a closer look at borrowers with large equity and little documented income, see Lendmire’s piece Best Asset-Based Cash-Out Refinance Program With High Equity and Low Income.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Office of the Comptroller of the Currency, Bulletin 2019-36
3. Cornell Law School Legal Information Institute, 12 CFR 1026.3
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Asset-Based Cash-Out Refinance Program With a 40-Year Term
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.