The Quick Read: A lender underwrites this loan by testing your documented assets, not your paycheck, and it does so on one of two paths: assets that cover the whole loan, or assets that are converted into a monthly qualifying income. Cash-out is held to tighter leverage than a purchase, and borrowed cash never counts as an asset. Every file is fully underwritten, and the assets are proven with statements.
- Path one, the asset qualifier path, counts eligible assets against the entire loan amount and documents no employment or income.
- Path two, the asset depletion path, divides usable assets by 60 months to create income, then runs a debt-to-income test.
- On the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, second home or investment property, subject to underwriting.
- Statements replace tax returns, pay stubs and employment verification. They do not replace documentation.
- Privately held company stock is not an eligible asset on either path.
This page is written for the cash-heavy, income-light borrower: a retiree living on a portfolio, someone who sold a business, an heir, or a household whose balances are large and whose tax returns are small. Lendmire is a mortgage broker, not a lender. It places these files with select lenders in its wholesale network, and the lender’s own review governs the outcome. Nothing here is a commitment to lend.
What Is an Asset-Based Cash-Out Refinance?
An asset-based cash-out refinance replaces your current mortgage, or pays off a free-and-clear property, with a larger loan and hands you the difference. You qualify on what you own rather than what you earn. Lenders use several names for it: asset qualifier, asset depletion, asset dissipation, asset utilization.
Two points get missed. A property with no mortgage is still a cash-out refinance, because you are pulling equity out of it. And “no income” never means “no documentation.” The lender sees your statements, your credit and the appraisal. What it does not ask for is tax returns, pay stubs or employment verification. Lendmire’s asset-based mortgage programs cover both paths below, through select lenders and subject to underwriting.
Key Terms Defined
Asset qualifier path: Eligible assets, after credit percentages, must equal or exceed the entire loan amount. No income is documented.
Asset depletion path: Usable assets divided by 60 months become monthly qualifying income, which then carries the housing payment and other debts.
Usable assets: The balance that counts after the lender applies its percentage to each account type.
Haircut: The part of an account balance that does not count. If securities count at 80%, the haircut is 20%.
Seasoning: How long funds have sat in an account, shown by statements.
Debt-to-income (DTI): Monthly debts divided by monthly qualifying income. It applies on the depletion path only.
Why Can a Lender Approve a Cash-Out With No Earned Income?
Because federal ability-to-repay rules allow assets to be the basis for repayment. Under the CFPB’s official interpretation of Regulation Z, a creditor may base its decision on income, on assets other than the home securing the loan, or on both. The same commentary gives savings as an example of an asset that can support a repayment finding.
The rule has a condition. The lender must verify the assets it relies on with third-party records. The text of 12 CFR 1026.43 calls for reasonably reliable evidence. That is why statements are the backbone of the file. Consumer loans on a principal residence or second home sit under this framework directly. A refinance on a non-owner-occupied rental is generally treated as a business-purpose loan, and the depletion path is the one that reaches investment property.
Two Ways Lenders Count Assets
Assets can be counted as coverage for the loan or as converted income. A borrower is qualified on one path at a time. Never blend the two tables.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Test applied | Assets must cover the whole loan | Assets ÷ 60 months = income |
| Income documented | None | Derived income only |
| DTI test | No | Yes |
| Leverage | 80% purchase, 75% refinance | 60% cash-out, all occupancies |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
On the qualifier path, the lender’s ability-to-repay review rests on the assets. Whether cash-out proceeds are allowed on that path, and at what leverage, is set by the lender and is not published. Do not plan around a figure no one has stated.
On the depletion path, leverage on a cash-out is 60% on a principal residence, second home or investment property. For comparison, the same path allows 80% on a purchase or rate-and-term refinance for a principal residence or second home, and 65% for an investment property. These are ceilings, not offers.
The Underwriting Walk-Through, Step by Step
Here is the order a file moves through. Each step is a place a file can stall.
1. Pick the path. The loan officer and borrower decide whether assets cover the loan outright or whether converted income fits better. Large balances against a modest loan favor the qualifier path. Balances that must carry a payment favor depletion.
2. Pull the collateral and credit. The lender orders an appraisal and reviews credit. 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 typically 0x30x12, and one 30-day late in twelve months is considered case by case. Multiple bankruptcies are not eligible.
3. Collect the statements. The qualifier path wants 60 days of seasoning and two months of statements for each qualifying account. The depletion path wants 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 on the depletion path.
4. Apply the percentages. Each account type is counted at its share (below). The lender totals what is left.
5. Run the test. Qualifier: usable assets must equal or exceed the entire new loan. Depletion: usable assets divided by 60 gives monthly income, and the full housing payment plus other debts must fit the DTI limit.
6. Test the new loan amount. The test runs against the new, larger loan, not the old payoff. This trips up borrowers who size the file on what they owe today.
7. Clear conditions. Expect requests for updated statements, source-of-funds explanations for large deposits, and appraisal items. Consumer-purpose loans carry TRID disclosures.
Programs change and every file is underwritten individually, subject to lender guidelines.
Which Assets Count, and How Much
Counting varies by path. State the path before you state a percentage.
| Asset | Qualifier path counts | Depletion path counts |
|---|---|---|
| Brokerage accounts | 100% | Securities at 80% |
| CDs, money market, savings | 100% | Cash and CDs at 100% |
| 401(k) and IRA | 90% under 59½, 100% at 59½+ | 70% at any age |
| Real-estate equity | Not listed | 60% |
Several things never count on the depletion path: 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 deserves its own sentence. It is not an eligible asset on either path. A founder’s route is documented liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their counting percentages.
Cryptocurrency, precious metals, collectibles, pledged or borrowed funds and business accounts beyond your ownership share are not published as eligible on either path. The route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
And the circularity trap: cash-out proceeds never count as qualifying assets. You cannot borrow against the house and then count that cash to qualify for the same loan.
How the Income Math Works on the Depletion Path
The formula is one line. Usable assets, after percentages, divided by 60 months equals monthly qualifying income.
Take an illustrative file. Say a borrower holds $1,500,000 in securities, which count at 80%, so $1,200,000 is usable. Add $300,000 in cash at 100%. Usable assets total $1,500,000. Divided by 60 months, that 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 qualifier path is simpler. Say a borrower seeks an $800,000 loan and holds $330,000 in brokerage accounts (100%, so $330,000), $300,000 in a 401(k) while under 59½ (90%, so $270,000) and $200,000 in savings (100%, so $200,000). Usable assets are $800,000, which equals the loan, so the file is reviewed on assets alone. Accounts combine.
Both examples are illustrative, and the lender’s own calculation governs. The CFPB’s compliance guide notes that the general standard sets no fixed DTI threshold and that unearned income such as interest and dividends can count toward income. That is the regulatory room these programs work inside.
Minimums and Supplements on the Depletion Path
Depletion has a size floor. 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, liquid assets can never be below $250,000.
Asset income can also supplement documented income, up to a 45% debt-to-income ratio. When it supplements, the minimum-assets rule is waived. That fits a borrower with a small pension or part-time earnings plus a large portfolio.
Reserves differ by path. 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.
Why the Same File Gets Different Answers
Across a wholesale network, programs do not all draw the line in the same place. Divisors, account percentages, minimum assets and seasoning vary by lender and by program. A borrower with a heavy retirement balance may fit one program better than another. A borrower with mostly cash may fit either.
That is the reason to work through a broker. Lendmire’s network spans multiple wholesale lenders, and matching a scenario to the right program is the job. The best program for your situation depends on your balances, the property, your credit and how much cash you want out.
Property and Occupancy
Occupancy changes the leverage on the depletion path. The qualifier path covers principal residence and second home.
| Collateral | Depletion purchase / rate-and-term | Depletion cash-out |
|---|---|---|
| Principal residence | 80% | 60% |
| Second home | 80% | 60% |
| Investment property | 65% | 60% |
The investment-property row matters. On a rental, the appraiser reports value and market rent, but an asset-qualified file does not use rent to qualify you. It is not a DSCR file.
Where Files Get Stuck
These are the usual causes of conditions or declines.
- Unseasoned deposits. A large deposit without a paper trail forces a source-of-funds explanation. Sale, inheritance and settlement funds are treated more gently on the depletion path, but they still need documents.
- Counting ineligible assets. Private stock, unvested RSUs, options and crypto are the common ones.
- Sizing on the old payoff. The test runs on the new loan.
- Stale statements. The depletion path’s 120-day and 45-day windows are strict.
- Borrowed funds. Pledged or borrowed money does not count.
- Housing event seasoning. On the depletion path, a housing event needs 4 years.
- Credit. Scores below the matrix or lates outside 0x30x12 narrow the options.
Is This the Right Route?
It depends on how you can document. Asset-based suits investors who are asset-rich and income-light. The tradeoff is leverage: the depletion path caps cash-out at 60%, which is lower than many income-based programs allow. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
| Your situation | Likely fit |
|---|---|
| Large balances, little documented income | Asset-based |
| Income shown through deposits | Bank statement program |
| Rental covers its own payment | DSCR, business-purpose |
| Strong W-2 or tax-return income | Conventional or full-doc jumbo |
Agency, FHA, VA, HELOC and bridge products follow their own rules and are not this program’s. If you want to compare, Lendmire’s requirements breakdown for asset-based cash-out refinances goes deeper on document lists.
Frequently Asked Questions
Do lenders still verify anything if I have no income?
Yes. Assets are verified with statements, and the lender reviews credit and orders an appraisal. The loan is fully underwritten. What is not requested is tax returns, pay stubs or employment verification.
Can I use the cash-out money to qualify?
No. Cash-out proceeds never count as qualifying assets. Qualification rests on assets that are already seasoned and documented.
Does privately held company stock count?
No. Privately held company stock is not an eligible asset on either path. Convert it to a seasoned cash balance through a sale or buyout, or use cash, public securities and retirement accounts at their counting percentages.
Is there a DTI test on the asset path?
On the depletion path, yes: derived income runs through the DTI test, and supplemental asset income is allowed up to a 45% ratio. On the qualifier path no income is documented, and the review rests on the assets.
Is a free-and-clear home treated as a cash-out?
Yes. Pulling equity from a property with no mortgage is still a cash-out refinance, and cash-out leverage limits apply.
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.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. 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 §1026.43 official interpretation
2. Cornell LII, 12 CFR 1026.43
3. CFPB ability-to-repay and qualified mortgage compliance guide
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Asset-Based Cash-Out Refinance Lenders With Low Documentation Requirements · Best Asset-Based Cash-Out Refinance Program With No Income Other Than Assets
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.