The Quick Read: The right program depends on whether your assets can cover the whole loan or must be converted into qualifying income, because the asset qualifier path and the asset depletion path treat a cash-out differently, and on a principal residence the proceeds may go toward a new primary home, subject to underwriting.
- The asset qualifier path covers the entire loan with eligible assets and documents no employment or income. Whether it allows cash-out, and at what leverage, is set by the lender and is not published.
- The asset depletion path divides usable assets by 60 months to create qualifying income. It allows a cash-out up to 60% loan-to-value on a principal residence or second home.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- Skipping the cash-out and using an asset-based purchase loan on the new home is often the cleaner route.
- Every file is fully underwritten. The assets are documented with statements, and there is no traditional personal-income documentation, pay stubs or employment verification.
Key Terms Defined
Cash-out refinance: a new mortgage on a home you already own that is larger than the old balance, so you receive the difference in cash.
Asset-based mortgage: a home loan that is reviewed around the money you hold rather than on paychecks or tax returns.
Asset qualifier path: the route where eligible assets, after the credit percentages, must equal or exceed the entire loan amount.
Asset depletion path: the route where usable assets are divided by 60 months to produce a monthly income figure that runs through the debt-to-income test.
Debt-to-income (DTI): your monthly debts divided by your monthly qualifying income.
Seasoning: the time funds must sit in your accounts, shown by statements, before a lender counts them.
Loan-to-value (LTV): the loan amount divided by the property’s appraised value.
Which Asset-Based Cash-Out Refinance Program Fits a New Primary Home Purchase?
The answer starts with a question about you, not about the lender. Are your balances large enough to cover the whole loan outright? Or are they large, but better used as a stream of income?
That choice is the first thing that sorts borrowers. Lendmire is a mortgage broker. It does not lend. It places files with select lenders whose asset-based mortgage programs fit the borrower’s statements, property, credit profile and goals.
This program is built for a specific reader. Think of a retiree, someone who sold a business, an heir, a person who received a settlement, or a household living off a portfolio. The balances are large. The documented income is small or irregular.
No single program is best for everyone. The best program for your situation depends on the property you are borrowing against, your credit, how much cash you need, and what your assets look like on paper. Lendmire shops that match across several lenders instead of fitting you to one.
Can a Cash-Out Refinance Fund a New Primary Home?
It can, when the loan is on a principal residence or second home and the lender’s program allows cash-out. That is a consumer mortgage, so using the proceeds toward your next home fits the purpose of the loan.
The flow has two separate loans. First, you refinance the home you own and take cash. Second, you buy the new home with its own mortgage, and the cash-out money helps with the down payment and closing costs.
Here is the catch. The second loan is underwritten on its own terms, and the first loan changes your numbers.
- The old home’s payment gets bigger. A larger balance means a larger payment, and on the depletion path that payment sits in your debt-to-income test.
- The proceeds are borrowed money. They do not count toward the assets that qualify you. Borrowed or pledged funds are not published as eligible on either path.
- The old home may be kept or sold. If you keep it, you carry two housing payments. If you plan to sell it, a cash-out may be a detour.
For that reason, a cash-out is not always the best tool. If the new home is the goal, ask whether an asset-based purchase loan on the new home does the job directly. On a purchase, the qualifier path goes up to 80% loan-to-value, and so does the depletion path on a principal residence or second home, subject to underwriting. A cash-out adds a second loan, a second appraisal and a second set of costs.
Lendmire’s piece Can You Use a Cash-Out Refinance to Buy a New Primary Home? covers the general mechanics.
How the Two Asset-Based Paths Treat a Cash-Out
You are qualified on one path at a time. You never blend the two tables.
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| How you qualify | Assets cover the whole loan | Assets ÷ 60 months = income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% LTV | Up to 80% (primary or second) |
| Refinance leverage | Up to 75% LTV | 80% rate-and-term |
| Cash-out leverage | Set by lender, not published | 60% on primary or second home |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | Lender’s matrix |
On the qualifier path, your usable assets must equal or exceed the entire loan. That makes it a strong fit if you hold more in liquid accounts than you plan to borrow. It is a weaker fit if you want to borrow most of what you own, or if you want to keep your balances untouched.
The depletion path is built for the opposite person. You have plenty of assets, but not enough to cover the loan outright. The lender converts what counts into monthly income, and that income carries the housing payment and your other debts.
Because the qualifier path leaves cash-out terms to each lender, a broker earns its keep here. Lendmire asks the lender in advance whether cash-out is allowed on that path and at what leverage. That prevents a surprise after you have paid for an appraisal.
What Counts as an Asset on Each Path
The two paths give credit differently, so name the path every time you do the math.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| Certificates of deposit | 100% | 100% |
| Money market and savings | 100% | Cash accounts at 100% |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not listed | 60% |
Some assets are not eligible on the depletion path at all: 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.
Privately held company stock is not an eligible asset on either path. That is the rule, with no partial credit. If you own a closely held business, the documented route is liquid assets. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages above.
Cryptocurrency, precious metals, collectibles and pledged funds are also not published as eligible on either path. If those make up most of your wealth, the route is converting them to a seasoned cash balance in a regulated account. The lender reviews the source of those funds.
Worked Examples
These shapes show how the credit percentages work. The lender’s own calculation governs.
Qualifier path. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts (100% counts, so $330,000). You hold $300,000 in a 401(k) and you are under 59½ (90% counts, so $270,000). You hold $200,000 in savings (100% counts, so $200,000). Your usable assets total $800,000, which equals the loan. You qualify on assets alone, with no income documented.
Depletion path. Say you hold $1,500,000 in securities (80% counts, so $1,200,000) and $300,000 in cash (100% counts, so $300,000). Your usable assets total $1,500,000. Divide by 60 months, and you have $25,000 of monthly qualifying income. That income then carries the housing payment and your other debts through the debt-to-income test.
The depletion path also has minimums. You need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you need no less than $250,000 liquid. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and when it does, the minimum-assets rule is waived.
Which Path Fits Which Buyer?
| Your situation | Likely route | Why |
|---|---|---|
| Liquid assets exceed the loan | Qualifier path | Assets cover the loan outright |
| Large portfolio, loan bigger than usable assets | Depletion path | Assets become income |
| Heavy in retirement accounts, under 59½ | Qualifier path often reads better | 90% credit, versus 70% on depletion |
| Heavy in real-estate equity | Depletion path | Equity counts at 60% |
| Need cash-out on a primary home | Depletion path, or ask on qualifier | Published 60% cash-out figure |
| Mostly private stock or crypto | Convert first | Neither is eligible as held |
Who does this not fit? Skip this program if your income is steady and well documented and your assets are modest. A standard mortgage may serve you better. Also skip it if most of your wealth sits in privately held company stock that you have not sold.
If your income is real but irregular, consider the bank statement mortgage instead. It is a separate program for borrowers who document income through their bank deposits rather than through their assets.
Credit matters on both paths. The qualifier path publishes a 600 minimum score, and the depletion path follows the lender’s matrix. A first-time investor on the depletion path needs 700. Housing history is typically 0x30x12, and 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 on the depletion path. All of this is subject to underwriting.
Step-by-Step Sequence
Order matters, because each step feeds the next.
1. Decide whether you need a cash-out at all. Compare it with an asset-based purchase loan on the new home.
2. Pick the path. Qualifier if assets cover the loan, depletion if assets must become income.
3. Season the assets. On the qualifier path, funds need 60 days of seasoning and two months of statements per account. On the depletion path, statements must be at least 120 days old at application, plus a recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning on the depletion path.
4. Confirm the cash-out terms before you order an appraisal. Ask about leverage and whether proceeds are allowed.
5. Complete the refinance. The appraisal sets the value, and the leverage cap sets how much you can borrow.
6. Document where the cash went. The new-home lender will ask for the settlement statement and bank statements showing the funds.
7. Underwrite the purchase separately. The new loan is its own file with its own review.
The refinance should be finished before the purchase file needs those funds. Plan the order with your broker before you sign a purchase contract.
Where the General Rule Breaks
The old home is an investment property. The depletion path allows investment property, but only as a business-purpose loan, at 65% on a purchase or rate-and-term and 60% on a cash-out. Business-purpose loans are reviewed differently from standard owner-occupied mortgages. The CFPB’s Regulation Z rule text exempts credit extended primarily for a business purpose. A compliance explainer from Compliance Alliance says the analysis focuses on the loan’s purpose, not the property securing it.
So the cash-out question changes. If proceeds from a rental go to a personal down payment, the loan’s purpose is mixed or personal. The Federal Reserve’s examination guide says mixed-purpose loans are judged on their primary purpose, and a borrower’s statement of purpose is part of the picture. Whether a given lender accepts personal-use proceeds on a business-purpose loan is a program-level answer. If it does not, the down payment should come from a primary-home cash-out or another source.
You move into the property. A loan made for a rental cannot later be treated as your home. Tell your broker the plan up front, and the file can be set up on the right basis.
The appraisal comes in short. Leverage is a percentage of appraised value. A lower value shrinks the cash you can take, and it can break a down payment you planned around. Build a cushion into the plan.
You own a founder’s stake in a company. The stock does not count. The route is the proceeds of a sale or conversion, seasoned and documented.
You are under 59½. On the qualifier path, a retirement balance counts at 90%. On the depletion path, it counts at 70% at any age. Pick the path with that in mind.
Two payments. If you keep the old home, the larger payment lands in your depletion-path debt-to-income test. If your new payment plus the old one is more than your derived income can carry, the file may not work at that leverage. Lowering the loan amount is the usual fix.
What to Prepare
Income paperwork is lighter, not absent. Every file is fully underwritten, and the assets are documented with statements.
- Statements for every account you want counted, covering the seasoning period on your path
- Proof of the source of any large recent deposit, such as a sale, inheritance or settlement
- A mortgage statement and property details for the home you are refinancing
- A purchase contract for the new home, once you have one
- ID and credit authorization
You do not provide tax returns, pay stubs or employment verification.
Alternatives Compared
| Option | Best when | Main drawback |
|---|---|---|
| Asset-based purchase loan | Assets cover the new home | Uses your assets as qualifier |
| Cash-out on current home | You keep the old home | Larger payment on the old home |
| HELOC | You need flexible funds | Second lien on your home |
| Bridge loan | The old home is for sale | Short-term and costly structure |
| Sale first | You can wait to buy | Possible gap in housing |
| Family gift | Relatives can help | Gift rules are set by the lender |
Each of these belongs to its own program, with its own rules. None of them is the asset-based program’s rule. A HELOC or a bridge product is a separate product with separate terms. Ask for the full terms before you compare.
One more point on asset-backed lines. A securities-backed credit line is a loan against your portfolio. An asset-based mortgage is a home loan that is qualified using your portfolio. They sound similar, and they work differently.
Where the Program Is Available
Consumer mortgage lending through this program is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Programs change, and every file is underwritten individually. The figures here are ceilings and floors, never offers, and nothing here is a commitment to lend.
Frequently Asked Questions
Can I use a cash-out refinance for the down payment on a new primary home?
On a principal residence or second home, the proceeds may go toward your next home, subject to underwriting. The cash-out is a separate loan from the purchase, so each is reviewed on its own. On an investment property, the loan is business-purpose, and personal-use proceeds depend on the lender’s policy.
Do cash-out proceeds count as assets for qualifying?
No. On the depletion path, cash-out proceeds never count as qualifying assets. Borrowed funds are also not published as eligible on the qualifier path. Your qualifying balance has to come from your own seasoned accounts.
Does privately held company stock count toward the assets?
No. The documented route is converting a sale or buyout into a seasoned cash balance. Public securities and retirement accounts count at their published percentages.
What cash-out leverage is available?
On the depletion path, a principal residence or second home goes up to 60% loan-to-value on a cash-out, and an investment property also goes up to 60%. On the qualifier path, cash-out terms are set by the lender and are not published, so Lendmire asks the lender before you commit to an appraisal.
Is this a no-doc loan?
No. Every file is fully underwritten and the assets are documented with statements. You provide no traditional personal-income documentation, pay stubs or employment verification, and the lender still reviews your credit, the property and your accounts.
The 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. Reach the team at 828-256-2183 or request a quote.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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.
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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. CFPB – Regulation Z § 1026.3
2. Compliance Alliance – Regulation Z and investment properties
3. Federal Reserve – Regulation Z background (CA letter 10-10)
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 to Go Fixed
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.