The Quick Read: Lenders underwrite this loan by first deciding how much of your brokerage balance counts, then testing that usable amount either against the whole loan or as converted monthly income, while the property, your credit and the documented source of your funds are reviewed like any other mortgage file. You document your assets with statements instead of tax returns, pay stubs or employment verification, and every file is fully underwritten.
- Path one, the asset qualifier path, asks whether your counted assets equal or exceed the entire loan amount.
- Path two, the asset depletion path, divides usable assets by 60 months to create income, then runs that income through the debt-to-income test.
- Brokerage accounts count at 100% on the qualifier path and securities count at 80% on the depletion path, subject to underwriting.
- Cash-out proceeds from the new loan never count as qualifying assets.
- A borrower is qualified on one path at a time, and the figures here are ceilings and floors, not offers.
What Is an Asset-Based Cash-Out Refinance?
An asset-based cash-out refinance replaces your current mortgage with a larger one and returns the difference as cash, while qualifying you on what you own instead of what you earn. The lender looks at your verified balances, not your paycheck. Think of a retiree living on a portfolio, someone who just sold a business, or a household with a large inheritance and a modest tax return.
No agency defines this product. It is a non-QM structure, which means it sits outside the standard agency mortgage box. Each program sets its own rules. Across our wholesale network, the rules fall into the two paths above, and that split drives everything else in the file.
Lendmire is a mortgage broker, not a lender. It arranges these loans through select lenders, and those lenders do the underwriting and approval. The asset-based mortgage programs Lendmire places are consumer mortgage loans offered 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.
One point on property type. A principal residence or second home can use either path. An investment property is available only on the asset depletion path, where the loan is business-purpose.
The Two Underwriting Tests Side by Side
The two paths answer different questions. The qualifier path asks whether your assets could pay off the loan outright. The depletion path asks whether your assets, spread over 60 months, produce enough monthly income to carry the loan and your other debts.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Core test | Counted assets cover the entire loan | Assets ÷ 60 months becomes income |
| Income documented | None | Derived income, tested against debts |
| Property types | Principal residence, 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 matrix |
| Reserves | None at or below 75% LTV | No published reserve months |
All figures are through select programs and subject to underwriting. Name the path whenever you read a number, because the two tables never blend. A figure that is true on one path is often false on the other.
How Underwriting Treats a Brokerage Account
A brokerage account is a marketable asset, so the underwriter counts it, but the share that counts depends on the path. On the qualifier path, brokerage accounts count at 100%. On the depletion path, securities count at 80%, and cash and CDs count at 100%.
A haircut is the part of a balance the lender does not count. On the depletion path the haircut on securities is 20%, because prices move before closing. The share that counts is what matters in the math.
| Holding | Qualifier path counts | Depletion path counts |
|---|---|---|
| Brokerage account | 100% | Securities at 80% |
| CDs, money market, savings | 100% | Cash and CDs at 100% |
| Retirement (401(k), IRA) | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Accounts combine, so a mix of brokerage, savings and retirement balances adds up toward the loan amount on the qualifier path.
Retirement money is discounted partly because early withdrawals before 59½ generally carry a 10% additional tax under IRS Topic 557; tax treatment varies, so consult a qualified professional.
Several holdings do not count. On 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, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path.
Privately held company stock is not an eligible asset on either path. A founder or shareholder qualifies by documenting liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their counted shares. The same route works for crypto and metals. Convert them to cash in a regulated account and let the lender review the source of the funds.
The Underwriting Sequence, Step by Step
An underwriter works through a cash-out file in a predictable order. Here is what happens, and what is checked at each point.
1. Purpose and occupancy. The lender confirms whether the home is a principal residence, second home or investment property. That decides which path is open and which leverage ceiling applies.
2. Asset inventory. You list the accounts you want counted. The lender confirms they are in your name, that the owner is on the statements, and that the funds are accessible.
3. Statements and seasoning. The lender checks that the balances have been in place long enough. The specific periods are below.
4. Applying counted percentages. Each account is multiplied by its percentage for the path you chose. Retirement balances carry age rules, and ineligible holdings drop out.
5. The path test. On the qualifier path, counted assets must equal or exceed the entire loan. On the depletion path, usable assets divided by 60 months become monthly income, which then carries the housing payment and other debts through the debt-to-income test.
6. Property and leverage. The collateral is appraised and the loan is capped at the maximum loan-to-value (LTV) for the occupancy type and the transaction.
7. Credit and final conditions. The lender reviews the credit score, housing history and any remaining items before it approves the loan. Approval is the lender’s decision, not the broker’s.
Where the file breaks, it usually breaks at step 2 or 3, when a balance turns out to be held somewhere the lender does not accept, or when a large recent deposit has no documented source.
Why Cash-Out Proceeds Never Count
The money you pull out of this refinance cannot be used to qualify for this refinance. That would be circular: you would be borrowing against the house to prove you can afford to borrow against the house. On the depletion path, cash-out proceeds never count as qualifying assets, and the same logic holds across the programs we place files with.
The practical result is that your qualifying assets must already exist, separate from the loan. If your plan is to refinance, park the proceeds in a brokerage account and then use that account for the next loan, expect the lender to exclude it.
Seasoning and Statements: What to Have Ready
Seasoning is the waiting period that proves the money is really yours and has been for a while. It keeps a lender from counting a balance that was moved in last week to pad the file.
- Qualifier path: 60 days of seasoning and two months of statements for each qualifying account.
- Depletion path: statements at least 120 days old at application, plus the most recent statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
The assets are documented on both paths. The only thing you skip is income paperwork: no traditional personal-income documentation, pay stubs or employment verification. A short document checklist looks like this:
- Full statements for every account you want counted, with all pages.
- A written explanation and paper trail for any large deposit or transfer.
- Proof of sale or settlement if the funds came from a business sale, inheritance or lawsuit.
- Your mortgage statement and homeowners information for the property being refinanced.
Property, Occupancy and Leverage
The asset test is only half the file. The property still has to appraise, and the loan still has to fit under the leverage ceiling.
On the qualifier path, leverage reaches up to 75% LTV on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on that path, and at what leverage, is set by the lender and is not published. On the depletion path, the ceilings for a cash-out refinance are 60% LTV on a principal residence or second home, and 60% LTV on an investment property. A rate-and-term refinance on the depletion path reaches 80% on a principal residence or second home, and 65% on an investment property. All are subject to underwriting. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Credit matters on both paths. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix, and a first-time investor on that path needs 700. Housing history is reviewed at 0x30x12, with one 30-day late in the last twelve months considered case by case. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
On a consumer mortgage, the lender must make a good-faith ability-to-repay determination that considers income, assets, employment, credit and expenses, according to the CFPB. On the qualifier path, that review rests on your assets. Investment-property loans on the depletion path are business-purpose loans, so they are reviewed differently from a standard owner-occupied mortgage.
Where the General Rule Breaks
The mechanics above hold for most files. These cases are where they bend.
Pledged securities. Securities pledged against a securities-based line of credit or a margin loan are a poor fit. Schwab’s investor-education page notes that the lender on such a line can demand repayment or more collateral if the pledged assets fall in value. That margin-call risk sits on top of any mortgage. Borrowed funds are not published as eligible assets on either path.
A falling market. If your securities drop between application and closing, the counted balance drops with them. A borrower leaning on a stock-heavy account needs a cushion, not a file that clears by a small margin.
Supplementing documented income. On the depletion path, asset-derived income may supplement documented income up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived.
Depletion minimums. When assets are your only income source, the depletion path wants qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never less than $250,000 liquid.
Vesting. Asset-based loans are typically vested in a personal name. If you hold the property in an LLC, subject to lender program eligibility, a business-purpose structure may fit better than this one.
Rent that covers the payment. If a rental pays for itself, a DSCR cash-out refinance may be the better tool. That program qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Assets then act as supporting evidence, such as reserves. Compare both before choosing.
A Worked Walkthrough
These two examples use the program percentages and are for illustration. The lender’s own calculation governs, subject to underwriting.
On the qualifier path, picture an $800,000 loan on a principal residence. You hold $330,000 in brokerage accounts, which count at 100%, so $330,000 counts. You hold $300,000 in a 401(k) and you are under 59½, so it counts at 90%, which is $270,000. You hold $200,000 in savings, which count at 100%, so $200,000 counts. That totals $800,000 of usable assets against an $800,000 loan, so the file is reviewed on assets alone. No income is documented.
On the depletion path, picture $1,500,000 in securities and $300,000 in cash. The securities count at 80%, which is $1,200,000. The cash counts at 100%, which is $300,000. That makes $1,500,000 usable. Divided by 60 months, it is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts through the debt-to-income test.
The contrast matters. The first borrower needed assets equal to the whole loan. The second borrower turned a large portfolio into income and kept the loan size flexible, within the leverage ceilings above.
Brokerage-Backed Cash-Out vs. Other Ways to Reach Your Money
If your wealth is in a brokerage account, you have more than one way to reach it. The choice depends on your goals, not on one program being better.
| Option | How it works | Main trade-off |
|---|---|---|
| Asset-based cash-out refinance | Assets qualify you; the house secures the loan | Leverage limits; the portfolio stays invested |
| Securities-based line of credit | Portfolio pledged as collateral | Margin-call risk if values fall |
| Selling securities | You turn holdings into cash | Gives up the position; may have its own costs |
| HELOC | A line secured by the home | Follows that product’s own income rules |
| DSCR cash-out refinance | Rental income covers the payment | Investment property only; different test |
The comparison for a portfolio-heavy borrower comes down to what you are willing to give up. Selling is simple but removes the holding. A pledged-portfolio line keeps the holding but ties your mortgage to market swings. An asset-based loan keeps the portfolio invested and adds a mortgage, which is a real cost to weigh. For related reading, see Lendmire’s piece Can You Get Approved for an Asset-Based Cash-Out Refinance Using a Brokerage Account?.
What the Decision Looks Like in Practice
Start with your balances and work backward. Add up what you hold, apply the counted shares for each path, and see which test you clear. If one path leaves you short, the other may still work.
Then look at the property. A principal residence gives you both paths. An investment property gives you one, with lower leverage. Ask yourself whether you need the cash for a long hold or a short one, because a portfolio-backed mortgage adds a payment you carry while the portfolio keeps moving.
The best program for your situation depends on your balances, credit profile, the property and how much cash you need. A broker that shops several wholesale lenders can match the scenario to the program.
Key Terms Defined
- Asset qualifier path: The route where your counted assets must equal or exceed the whole loan, with no income documented.
- Asset depletion path: The route where usable assets divided by 60 months become monthly income for the debt-to-income test.
- Haircut: The part of an account balance a lender does not count, such as the 20% of securities on the depletion path.
- Seasoning: The waiting period that shows funds have been yours for a set time before application.
- Debt-to-income (DTI): Your monthly debts, including the new housing payment, compared with your monthly income.
- Loan-to-value (LTV): The loan amount divided by the property’s appraised value.
Frequently Asked Questions
Can I use stock in my own private company to qualify?
No. If you sell the company or a stake in it, the proceeds can become a seasoned cash balance that the lender reviews. Funds from the sale of a business are excused from the 120-day statement seasoning on the depletion path.
Do I have to show income on this loan?
No traditional personal-income documentation, pay stubs or employment verification are required, but every file is fully underwritten. The qualifier path documents no income at all, and the depletion path derives income from your assets. Your assets, credit and the property are all reviewed.
Do retirement accounts count the same as a brokerage account?
No. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and at 100% from 59½ on. On the depletion path, retirement accounts count at 70% at any age, while securities count at 80%.
Can I use the cash-out money as a qualifying asset?
No. Cash-out proceeds from the same loan never count as qualifying assets on the depletion path. Your qualifying assets must exist separately from the loan and be seasoned.
Which path fits me?
It depends on your balances and goals. If your counted assets equal or exceed the whole loan, the qualifier path may fit. If you hold a large portfolio but want flexibility on loan size, the depletion path converts it into income. Investment property is available only on the depletion path.
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. This is not a commitment to lend, and qualification is subject to lender guidelines and underwriting.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps self-employed and high-net-worth borrowers in 16 states qualify on bank statements, a profit-and-loss statement, 1099s or liquid assets instead of tax returns, through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. CFPB
3. Schwab – 3 Ways to Borrow Against Your Assets
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get Approved for an Asset-Based Cash-Out Refinance Using a Brokerage Account? · Asset-Based Cash-Out Refinance Lenders With Nontraditional Income Proof · Asset-Based Cash-Out Refinance Requirements After Selling a Business
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.