The Quick Read: Lenders that write these loans qualify a cash-out refinance on documented balances instead of tax returns, pay stubs or employment verification, and your fit depends on whether your assets cover the whole loan or get converted into monthly qualifying income, with cash-out leverage set by the path, the property and underwriting. Every file is still fully underwritten. The assets are documented with statements, and the lender reviews credit, the property and the source of funds.
- Two paths, one at a time. On the asset qualifier path, eligible assets must cover the entire loan. On the asset depletion path, usable assets divided by 60 months become qualifying income.
- Cash-out is the tight spot. On the depletion path, cash-out tops out at 60% loan-to-value on a principal residence, a second home or an investment property, subject to underwriting.
- Not every asset counts. Privately held company stock is not an eligible asset on either path.
- Cash-out proceeds never count as qualifying assets on the depletion path.
What an Asset-Based Cash-Out Refinance Actually Is
A cash-out refinance replaces your current mortgage with a larger one and hands you the difference in cash. Asset-based qualifying changes what the lender looks at to approve it. Instead of W-2s, tax returns and pay stubs, the lender looks at what you own.
That fits a specific reader. Picture a retiree living on a portfolio, a founder who just sold a company, or someone who received an inheritance or settlement. The balances are large, but the documented income is thin or absent.
Here is the point people miss. “Nontraditional income proof” does not mean “no proof.” It means the proof is your statements rather than your paycheck. Across the wholesale network Lendmire works with, the lenders that write this product still pull credit, order an appraisal, review title and trace where the money came from. The program is documented. The documents are just different.
Lendmire is a mortgage broker, not a lender. It places these files with select lenders, and the lender makes every credit decision. The asset-based mortgage programs it arranges are consumer mortgages on a principal residence or second home. An investment property qualifies only on the depletion path.
Key Terms Defined
Asset qualifier path: The lender counts your eligible assets, and they must equal or exceed the whole loan amount. No employment or income is documented.
Asset depletion path: The lender converts usable assets into a monthly qualifying income by dividing them by 60 months. That income then runs through the debt-to-income test.
Haircut: The share of an account’s balance the lender will not count. A 70% credit means a 30% haircut.
Seasoning: The length of time money must sit in your account, shown on statements, before it counts.
Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your monthly qualifying income.
Loan-to-value (LTV): The loan amount compared with the property’s appraised value.
Which Path Fits You?
You are qualified on one path at a time. Never blend the two tables below.
If your liquid balances are at least as large as the loan, the qualifier path is the cleaner fit. If your balances are large but smaller than the loan, the depletion path turns them into income instead. Figures are program ceilings and floors through select programs, subject to underwriting. They are not offers.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Usable assets ÷ 60 months = income |
| Income documented | None | Derived income runs through DTI |
| Cash-out leverage | Set by lender, not published | 60% LTV on all property types |
| Property types | Primary home, second home | Also investment property |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum score | The lender’s score matrix |
On the qualifier path, purchase leverage reaches 80% and refinance leverage reaches 75%. On the depletion path, a principal residence or second home reaches 80% on a purchase or rate-and-term refinance. An investment property reaches 65% on those transactions.
What Counts as an Asset (and What Doesn’t)
Each path counts a different share of each account. Here is the credit each earns, subject to underwriting.
| Asset | Qualifier Path | Depletion Path |
|---|---|---|
| Brokerage / securities | 100% | 80% |
| Certificates of deposit | 100% | 100% |
| Money market | 100% | Not listed separately |
| Savings / cash accounts | 100% | 100% |
| 401(k) and IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
On the qualifier path, accounts combine. You add the credited balances together and compare the total with the loan.
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 Stock and Other Assets That Don’t Count
Privately held company stock is not an eligible asset on either path. Closely held shares earn no percentage of credit. The route for a founder or shareholder is documented liquid assets. That means seasoned proceeds from a sale or buyout converted to cash, cash itself, public securities, and retirement accounts at their haircuts.
Cryptocurrency, precious metals and collectibles are not published as eligible on either path. Business accounts beyond your ownership share are not published as eligible either. Neither are pledged or borrowed funds. The documented route for these is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source.
Plan this before you apply. Converting a position, then letting the statements age, is far easier than discovering the problem mid-file.
How Underwriting Treats the File, Step by Step
Here is the sequence on a typical file. Every step is subject to underwriting.
1. Pick the path. Your balances against the loan amount decide it. A broker shops the scenario across wholesale lenders and matches it to the program that fits.
2. Document the assets. On the qualifier path, expect 60 days of seasoning and two months of statements for each qualifying account. On the depletion path, statements must be at least 120 days old at application, plus the most recent statement within 45 days.
3. Check credit. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case.
4. Appraise the property. Value sets the leverage cap, and the loan amount must fit under it.
5. Apply the credit percentages. Each account’s balance is cut to its eligible share.
6. Run the test for your path. The qualifier path compares usable assets with the loan. The depletion path divides usable assets by 60 and runs the result through DTI.
7. Review the source of funds. Large recent deposits get questioned. Seasoned money is cleaner.
Reserves differ by path. The qualifier path requires none at or below 75% LTV, and above that the lender sets them. The depletion path publishes no reserve months. Every figure here is subject to underwriting and lender guidelines, including property type, leverage and credit profile. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A Worked Example
These numbers show the shape of the math. The lender’s own calculation governs.
Qualifier path. Take an $800,000 loan. The borrower holds $330,000 in brokerage accounts, which counts at 100%, or $330,000. A 401(k) of $300,000 under age 59½ counts at 90%, or $270,000. Savings of $200,000 count at 100%, or $200,000. Usable assets total $800,000, so the borrower is reviewed on assets alone, subject to underwriting.
Depletion path. Take $1,500,000 in securities, counted at 80%, or $1,200,000. Add $300,000 in cash at 100%, or $300,000. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income must then carry the housing payment and other debts through the DTI test.
Notice what the depletion example does not say. It does not say the borrower qualifies. Income of that size still has to clear DTI once the new payment is counted.
Why Cash-Out Is the Tightest Part
Cash-out is where asset-based lending gets conservative. Lenders cap leverage lower when you pull equity out, because less cushion remains if values fall.
On the depletion path, a cash-out refinance on a principal residence, second home or investment property is capped at 60% LTV, through select programs. That is well below the 80% available on a purchase or rate-and-term refinance of a primary home on the same path. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
On the qualifier path, whether cash-out proceeds are allowed, and at what leverage, is set by each lender and is not published. A broker earns its keep here. It can ask which lenders in the network permit cash-out on this path for your property before you spend money on an appraisal.
Two more rules matter:
- Proceeds never count. On the depletion path, the cash you pull out cannot be counted as a qualifying asset. You cannot borrow the money that proves you can borrow.
- A bigger loan stresses DTI. The new, larger payment goes into the DTI test on the depletion path. Size the loan to the test, not to the maximum.
Where the General Rule Breaks
Several situations bend the rules above.
Investment property. The qualifier path covers a principal residence or second home. An investment property qualifies only on the depletion path, at 65% LTV on a purchase or rate-and-term refinance and 60% on a cash-out. Because this loan is business-purpose, it is reviewed differently from a standard owner-occupied mortgage. The CFPB’s exam procedures treat credit extended primarily for a business purpose as outside the consumer-credit rules. A first-time investor on the depletion path needs a 700 score. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Principal residence or second home. These are consumer-purpose loans. Even outside the qualified mortgage box, a lender must still reasonably conclude the borrower can repay, which is why the asset review is thorough. The Federal Register’s Seasoned QM rule shows how the CFPB treats non-QM loans for borrowers who can repay but fall outside that definition.
Seasoning exceptions. On the depletion path, funds from the sale of a business, an inheritance or a legal settlement are excused from the 120-day statement-age requirement. That helps recent sellers and heirs.
Asset-derived income can supplement documented income, up to a 45% DTI. When it does, the minimum-assets rule is waived.
Credit events. Multiple bankruptcies are not eligible. A housing event such as a foreclosure needs 4 years of seasoning on the depletion path.
Depletion minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When depletion is your only income source, you also need at least $250,000 liquid.
How a Broker Finds the Right Lender
The lenders that write this product depend on your situation. The best program for your file turns on property type, credit, leverage need and how your assets are held.
Lendmire does not originate these loans. It works with a network of select wholesale lenders and shops the scenario to find a program that fits. Large retail lenders often underwrite on tax returns, so borrowers with heavy balances and light income may not find a fit there. Wholesale lenders that write asset-based programs set their own overlays, which is why two lenders can answer the same file differently.
Before you commit, ask any lender or broker these questions:
- Which path does my file fit, and is cash-out allowed on it?
- What credit percentage does each of my account types earn?
- How old must my statements be, and is a sale or inheritance excused?
- What minimum assets or reserves apply?
- How does the cash-out leverage cap compare with a rate-and-term refinance?
Other Nontraditional Income Routes
Asset-based is one route among several. The right one depends on how you hold wealth. Lendmire’s piece Bank Statement Cash-Out Refinance Lenders With Nontraditional Income Proof covers the deposit-based route in detail.
| Route | What You Document | Best Fit |
|---|---|---|
| Asset-based | Account statements | Cash-heavy, income-light |
| Bank statement | Business or personal deposits | Self-employed with strong deposits |
| DSCR | Rental income vs. payment | Investor refinancing a rental |
| HELOC | Varies by lender | Keeping a low first mortgage |
A bank statement program is for borrowers who document income through deposits. Business-purpose rental financing runs through DSCR instead. A HELOC is a second loan on top of your first mortgage, so it can make sense when you want to keep the existing first lien in place.
Who This Fits
The product is built for people whose wealth sits in accounts, not paychecks:
- Retirees living on a portfolio, with little reportable income.
- Business sellers holding proceeds in cash, who need seasoned, documented funds.
- Heirs and settlement recipients with large balances and no payroll.
- Early-retired professionals drawing down savings.
- Portfolio households whose income is real but not on a return.
It is a poor fit if your balances are small compared with the loan, or if your wealth sits mostly in private company shares or other ineligible assets.
Documents to Prepare
A clean file moves through underwriting more smoothly. Gather these first:
- Statements for each qualifying account, meeting your path’s seasoning rule
- A retirement account statement showing your age-based credit
- Records for any large deposits or sale proceeds
- Mortgage statement or payoff for the property
- Insurance and property tax information
- Identification and credit authorization
Risks and When It’s the Wrong Tool
A cash-out refinance adds debt against your home. If your balances are mostly securities, a market drop can shrink the assets that qualified you. Retirement withdrawals and account draws also reduce what you hold over time.
Consider another route if you have steady documented income and can use a standard program. Skip cash-out entirely if you do not have a clear use for the money. And remember that this is a consumer mortgage when it is on a home you live in, so standard consumer disclosures apply.
Frequently Asked Questions
Do I need to prove income to use an asset-based cash-out refinance?
Not through tax returns, pay stubs or employment verification. On the asset qualifier path, no employment or income is documented. On the asset depletion path, income is derived from your assets and run through the DTI test. Either way, the file is fully underwritten and your assets are documented with statements, subject to lender guidelines.
Can cash-out proceeds count toward qualifying?
No. On the depletion path, cash-out proceeds never count as qualifying assets. You must qualify on the balances you hold before the loan, after the credit percentages are applied.
Is cash-out available on every property type?
It depends on the path. On the depletion path, cash-out reaches 60% LTV on a principal residence, second home or investment property. On the qualifier path, cash-out availability and leverage are set by each lender and are not published, so a broker checks which lenders permit it for your scenario. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does my private company stock count as an asset?
No. If you sell or buy out your shares, the proceeds, once converted to a seasoned cash balance, become documented liquid assets. The lender reviews the source.
Where is this program available?
Lendmire’s consumer mortgage lending is licensed in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Availability depends on the property and the lender.
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. Call 828-256-2183 or request a quote.
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.
For how equity extraction works on an investment property, see 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. CFPB TILA/Reg Z exam procedures
2. Federal Register Seasoned QM 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: Best Asset-Based Cash-Out Refinance Program With No Income Other Than Assets · Asset-Based Cash-Out Refinance Requirements With No Income Verification
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
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.