The Quick Read: Yes, vested 401(k) and IRA balances can help you get approved, because select asset-based programs count them toward the loan, but they count at a discount or at full value depending on the path, your age, and the property, and every file is underwritten individually. One path asks whether your assets cover the whole loan. The other turns your assets into monthly qualifying income. You are qualified on one path at a time.
- Retirement accounts count on both paths, subject to underwriting. They do not count dollar for dollar on every path.
- On the asset qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older.
- On the asset depletion path, retirement accounts count at 70% at any age.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- You document the assets with statements. You do not provide tax returns, pay stubs, or employment verification.
How Does Asset-Based Approval Work on a Cash-Out?
An asset-based mortgage is reviewed around what you own instead of what you earn. The lender looks at statements, applies a credit percentage to each account type, and decides whether the result carries the loan. Across Lendmire’s wholesale network, this is built for people with large balances and small paychecks. Think retirees, business sellers, and households living off a portfolio.
The two paths work very differently. Lendmire arranges them through asset-based mortgage programs placed with select lenders, and the table shows the split.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| What the assets do | Cover the entire loan | Become monthly income |
| Income documented | None | Derived from assets |
| Debt-to-income test | Not run on income | Yes |
| Refinance leverage | Up to 75% (primary or second home) | 60% on a cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
Here is the catch on cash-out. The qualifier path publishes 75% on a refinance for a principal residence or second home. Whether cash-out proceeds are allowed there, and at what leverage, is set by the individual lender. Ask before you plan around it. The depletion path states its cash-out leverage plainly: 60%, on a principal residence, a second home, or an investment property. All figures are ceilings and floors, subject to underwriting, not offers.
How Are Retirement Accounts Counted?
Retirement accounts count, but usually at a discount. The share that counts is set by the path, and on the qualifier path it also depends on your age. Balances must be vested and reachable, and the percentage applies to the statement balance, not to what you would net after a withdrawal.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| Savings, CDs, money market | 100% | Cash and CDs 100% |
| 401(k) or IRA, under 59½ | 90% | 70% |
| 401(k) or IRA, 59½ or older | 100% | 70% |
| Real-estate equity | Not listed | 60% |
Why discount retirement money at all? Pulling funds from an IRA before 59½ generally triggers a 10% additional tax on top of regular income tax, and the same age line applies to 401(k)s. Lenders also know market balances move. The discount reflects that friction. Tax treatment varies; consult a qualified professional.
You do not have to withdraw anything to use the balance. The lender counts it from your statements. On the depletion path, the income is a calculation, not a withdrawal schedule. Your accounts stay invested.
Worked Example A: Assets Cover the Loan
This example is illustrative, and the lender’s own calculation governs. Say an $800,000 loan is the target on the asset qualifier path. You hold $330,000 in brokerage accounts, $300,000 in a 401(k), and $200,000 in savings, and you are under 59½.
- Brokerage at 100% counts $330,000.
- The 401(k) at 90% counts $270,000.
- Savings at 100% counts $200,000.
Usable assets total $800,000. That equals the loan, so this file is reviewed on assets alone, subject to underwriting. Notice what carried it. The 401(k) contributed, but without the brokerage and savings the number would fall short. At 59½ or older, the same 401(k) counts at 100% and adds $30,000 more.
On this path the credit floor is 600, and accounts combine. No reserves are required at or below 75% loan-to-value on a refinance, and above that the lender sets them.
Worked Example B: Assets Become Income
Now the depletion path, again illustrative. Say you hold $1,000,000 in an IRA and $500,000 in cash.
- The IRA at 70% counts $700,000.
- Cash at 100% counts $500,000.
- Usable assets total $1,200,000.
Divide by 60 months and you get $20,000 of monthly qualifying income. That income must then carry the new housing payment and your other monthly debts through the debt-to-income test. A large balance does not guarantee a pass. A big existing debt load can still sink the file.
The program also sets minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when asset depletion is your only income source. If you have documented income too, asset income can supplement it up to a 45% debt-to-income ratio, and the minimum-assets rule is then waived.
Do Cash-Out Proceeds Count as Assets?
No. Cash-out proceeds never count as qualifying assets on the depletion path. The money you pull from the home cannot be used to qualify for the same loan. This matters when you plan to cash out and then use that cash as your cushion. The lender will look for the cushion somewhere else.
Leverage is the other limit. On the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, second home, or investment property. That is lower than the 80% available on a purchase or rate-and-term refinance for a principal residence or second home. Plan your target amount around 60%, not 80%.
Two borrowers illustrate the tradeoff. A retiree with a large home and a large IRA may find the depletion path fits a cash-out because the 70% credit still produces plenty of income. A borrower whose assets just barely cover the new loan may find the qualifier path cleaner, if the lender allows cash-out there at all.
Rules That Trip Up Retirement-Heavy Borrowers
Most declines on these files come from how the accounts are held, not from how large they are. These are the points to check first.
- Vesting. Only the vested balance counts. Unvested employer contributions do not.
- Access. Some employer plans lock funds while you are still employed. Confirm the plan allows withdrawals regardless of employment status.
- Plan loans. An outstanding loan against your 401(k) reduces the usable balance. Expect the lender to net it out.
- Roth accounts. Treatment can vary by lender. Ask how your Roth balance is counted before you rely on it.
- No double counting. One balance cannot both generate income and also cover the loan. You pick a path.
- Ownership. Funds must sit in your name. Money in a partnership or business account that you only partly own stalls the file, and only your ownership share counts.
- Ineligible assets. Privately held company stock is not an eligible asset on either path. Stock options and non-vested restricted stock units are not eligible on the depletion path. Cryptocurrency, precious metals, and collectibles are not published as eligible on either path. Convert them to a seasoned cash balance in a regulated account and the lender reviews the source.
That last point matters to founders. A business owner holding mostly company shares has a documented route: sell or convert, let the proceeds season, and then qualify on cash. Public securities and retirement accounts count at their listed credit.
Can You Use This on a Rental Property?
Sometimes, on the depletion path only. Investment property is eligible there, with cash-out capped at 60% and purchase or rate-and-term at 65%. Because the loan is for investment, it is treated as business-purpose lending, and business-purpose credit is exempt from the consumer rules in Regulation Z. Your primary residence or second home is a consumer loan with its own review.
A first-time investor on the depletion path needs a 700 score. If your goal is to qualify on a rental’s own income, that is a different loan. Business-purpose rental financing is DSCR, and it tests the property’s rent against its payment. It does not test your balances. Pick the path that matches your strongest evidence: assets or rent.
When Does Another Loan Fit Better?
An asset-based loan is one tool among several. Other programs follow their own rules, and these are attributed to them, not to this program.
| Your situation | Often a better fit |
|---|---|
| Steady documented income, modest assets | Conventional or full-doc jumbo |
| Self-employed, large monthly deposits | Bank statement program |
| Rental that covers its own payment | DSCR loan |
| Large liquid assets, thin income | Asset qualifier or depletion |
| Short-term cash need | HELOC or bridge loan |
Why Do Retirement-Heavy Files Get Declined?
Large portfolios get declined for ordinary reasons. A few of them come up again and again.
- Math shortfall. Retirement balances shrink after the credit percentage, and the total falls below the loan on the qualifier path.
- Too much monthly debt. On the depletion path, derived income may not clear the debt-to-income test.
- Stale statements. Depletion statements must be at least 120 days old at application, plus the most recent one within 45 days. Qualifier accounts need 60 days of seasoning and two months of statements each.
- Unsourced deposits. Large recent deposits need an explanation. Sale-of-business, inheritance, and legal-settlement funds are excused from depletion seasoning, but the source is still reviewed.
- Credit or housing history. The program looks for 0x30x12 housing history. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning on the depletion path.
The fixes are practical. Move funds into eligible, regulated accounts early. Pay down monthly debts before you apply. Gather complete statements.
What Documents Should You Gather?
Every file is fully underwritten, and the assets are documented. What you skip is income paperwork: no traditional personal-income documentation, pay stubs, or employment verification. Expect to provide the following.
- Two months of statements for each qualifying account, all pages.
- Statements within the required age windows for your path.
- Proof the accounts are in your name.
- Plan documents showing vesting and withdrawal access for any 401(k).
- Details of any outstanding plan loan.
- Source documents for any large recent deposit.
- A credit report and housing payment history.
What Are the Risks and Tradeoffs?
A cash-out replaces assets you hold with debt on your home. If the market drops, your portfolio shrinks while the loan stays the same. A lower portfolio value can also weaken your position if you ever need to refinance again.
On the depletion path the debt-to-income test uses a stable formula. Real life is less tidy. Plan to keep a cushion of accessible cash beyond what the lender requires. And remember that retirement balances are your future income. Borrowing against your home instead of withdrawing can preserve those accounts, but it adds a payment you must carry for years.
Program details change, and each file is subject to lender guidelines, credit approval, and underwriting. Lendmire is a broker. It arranges these loans through select lenders in its network, and does not lend. The consumer asset-based program covers 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington.
Key Terms Defined
Asset qualifier: A path where eligible assets, after credit percentages, must equal or exceed the entire loan amount.
Asset depletion: A path that divides usable assets by 60 months to create monthly qualifying income.
Haircut: The share of an account’s balance that does not count toward qualifying.
Seasoning: The period funds must sit in your account before the lender will count them.
Vested balance: The part of a retirement account that is legally yours, with no strings tied to employer rules.
Debt-to-income ratio: Your monthly debts divided by your monthly qualifying income.
Frequently Asked Questions
Do I have to withdraw money from my 401(k) or IRA to qualify?
No. The lender counts the balance from your statements. Your money stays invested. On the depletion path, the income is a calculation, not an actual withdrawal.
Does my age change how retirement accounts count?
On the qualifier path, yes. 401(k) and IRA balances count at 90% under 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age.
Can the cash I take out count toward qualifying?
No. The cash you take out cannot serve as your cushion either. Qualifying assets must come from separate, seasoned accounts.
Can I use company stock I own privately?
The route is a sale or buyout converted into a seasoned cash balance, plus any public securities or retirement accounts.
What if my retirement balance is large but my credit is average?
The qualifier path has a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix, and a first-time investor there needs 700. A large balance helps but does not replace the credit review.
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.
Investors weighing their equity options can start with Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. IRS Topic 557, Additional Tax on Early Distributions
2. CFPB Regulation Z § 1026.3, Exemptions
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 in Retirement Without a Regular Paycheck · Top Asset-Based Cash-Out Refinance Providers With No Income Verification · Asset-Based Cash-Out Refinance Requirements on a Non-Warrantable Condo
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.