The Quick Read: Large retail banks mostly underwrite on documented personal income, so a retiree with big balances and a small pension usually does not fit their boxes. The programs that qualify on assets sit with specialty lenders, and a broker such as Lendmire shops them for you. Which path fits depends on whether your assets cover the loan outright or have to be converted into income.
- Asset qualifier path: eligible assets must equal or exceed the entire loan, and no employment or income is documented. Whether cash-out proceeds are allowed on this path is set by the lender and is not published.
- Asset depletion path: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Cash-out leverage on the asset depletion path is up to 60%, on a principal residence, a second home or an investment property, subject to underwriting.
- Privately held company stock is not an eligible asset on either path.
- Every file is fully underwritten, and the assets are documented with statements.
A bank that sorts applicants by traditional employment income or pension letters sees a small number and stops. Asset-based programs read the same file differently. This article walks through how, step by step.
What Is an Asset-Based Cash-Out Refinance?
It is a refinance that pays off your current mortgage and returns the difference as cash, with approval resting on your documented assets rather than a paycheck. Two separate mechanisms get called “asset-based,” and mixing them up causes most of the confusion.
The first is the asset qualifier path. Your eligible assets, after the credit percentages below, must equal or exceed the whole loan amount. No employment or income is documented. The second is the asset depletion path. The lender converts usable assets into a monthly qualifying income, and that income has to carry the housing payment and your other debts.
A borrower is qualified on one path at a time. The two paths never blend.
Lendmire’s asset-based mortgage programs cover both paths through select lenders in its wholesale network, subject to underwriting.
Which Banks Offer It? Categories, Not Names
Large banks rarely write these loans as a standard product. Retail banks, credit unions and agency-style lenders mostly run on income, tax returns and debt-to-income math. A retiree whose income is a pension and Social Security often looks thin under that test, even with a seven-figure portfolio.
The lenders that write asset-based loans tend to be specialty and portfolio lenders. Their guidelines differ from one another, and so do their overlays. That is where a broker earns its place. Lendmire works with a network of wholesale lenders and matches the scenario to the program. The best program for your situation depends on the property, your credit profile, the leverage you need and how your assets are held.
| Lender type | How it treats assets | Cash-out friendliness |
|---|---|---|
| Large retail bank | Income and DTI first | Limited for retirees |
| Agency-style conforming | Documented income and DTI | Limited for retirees |
| Specialty or portfolio lender | Assets can carry or replace income | Program-dependent |
| Wholesale network via a broker | Several programs compared | Matched to scenario |
Key Terms Defined
Cash-out refinance: a new mortgage that pays off the old one and returns the leftover equity as cash.
Asset qualifier: a path where eligible assets must cover the entire loan and no income is documented.
Asset depletion: a path where usable assets divided by 60 months become qualifying monthly income.
Haircut: the part of an asset balance that does not count, such as the 20% of securities that falls outside the 80% that counts.
Seasoning: the length of time funds must sit in an account before they count.
Step by Step: How Underwriting Treats the File
1. Pick the path. If your eligible assets cover the whole loan, the qualifier path is cleaner. If they cannot, the depletion path turns them into income instead.
2. Count the assets. Each account type counts at a set share of its balance, covered in the next section.
3. Season the funds. Statements must show the money has been in place long enough.
4. Run the credit. The qualifier path has a 600 minimum score. The depletion path follows the lender’s matrix.
5. Size the loan. Leverage depends on the path, the property and the transaction.
6. Order the appraisal and title. These are standard on any mortgage.
Underwriting is a full review on both paths. These programs skip traditional personal-income documentation, pay stubs and employment verification. They do not skip underwriting. That is also what makes a consumer file here different from a business-purpose investor loan. Consumer mortgage disclosure rules apply on a principal residence or second home.
What Counts, and at What Percentage
On the qualifier path, the shares that count are:
- Brokerage accounts, CDs, money market and savings: 100%.
- 401(k) and IRA balances: 90% under age 59½, 100% at 59½ or older.
- Accounts combine.
On the depletion path:
- Cash accounts and CDs: 100%.
- Securities: 80%.
- Retirement accounts: 70% at any age.
- Real-estate equity: 60%.
Not eligible on the depletion path: custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, privately held stock, stock options, non-vested restricted stock units and funds from non-regulated financial companies.
Privately held stock deserves its own sentence. It is not an eligible asset on either path. A founder or shareholder qualifies through documented liquid assets instead: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages. Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are also not published as eligible. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Two Worked Examples
Qualifier path: an $800,000 loan with $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) under 59½ (90% = $270,000) and $200,000 in savings (100% = $200,000). That counts $800,000 of usable assets and qualifies on assets alone.
Depletion path: $1,500,000 in securities counts at 80%, which is $1,200,000. Adding $300,000 in cash at 100%, which is $300,000, brings usable assets to $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income, which then carries the housing payment and other debts through the debt-to-income test.
These are illustrations. The lender’s own calculation governs.
Leverage, Loan Size and Where Cash-Out Fits
Cash-out is where the two paths split.
- Asset qualifier path: up to 80% loan-to-value on a purchase and 75% on a refinance, on a principal residence or second home. Whether cash-out proceeds are allowed on this path, and at what leverage, is set by the lender and is not published. Loans run up to $4,000,000.
- Asset depletion path: up to 80% on a purchase or rate-and-term refinance and 60% on a cash-out, on a principal residence or second home. On an investment property, 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Loans run from $125,000 to $3,500,000.
On the depletion path, cash-out proceeds never count as qualifying assets, so the assets that qualify you must already be in place before closing. Credit is its own gate: 600 is the qualifier path’s published floor, a first-time investor on the depletion path needs 700, and the housing history standard is 0x30x12. Multiple bankruptcies are not eligible. All figures are through select programs and subject to underwriting.
On the depletion path, you also need qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance. The floor is $250,000 liquid when asset depletion is your only income source. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio. When it does, the minimum-assets rule is waived.
Seasoning and Statements
This is where clean files separate from messy ones. The qualifier path wants 60 days of seasoning and two months of statements per qualifying account. The depletion path wants statements at least 120 days old at application, plus the most recent statement within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that depletion-path seasoning, though the proceeds still need to be documented as a cash balance in a regulated account.
Large recent deposits with no paper trail are the usual snag. If you moved money between accounts, keep the statements that show it.
Where the General Rule Breaks
Several edge cases change the answer.
- Privately held stock. Covered above. The route is a sale converted to seasoned cash.
- Retirement accounts under 59½. They count at 90% on the qualifier path and 70% on the depletion path.
- Early retirees with thin pensions. Assets can supplement documented income on the depletion path, with the minimum-assets rule waived.
- A rental, not a residence. A rental property can qualify on the depletion path. Because that loan is business-purpose, the paperwork differs from a residence loan. Regulation Z’s business-purpose provisions draw that line. Counsel commentary from Fortra Law notes that business-purpose loans are not free of every rule.
- Personal use of proceeds. Doss Law’s guide gives the example of a rental cash-out used to pay personal taxes, which it treats as consumer-purpose. Purpose is judged per transaction, so state it honestly.
For a related look at the same problem, see Lendmire’s piece on the asset-based cash-out refinance program for retirees living on fixed income.
The Fixed-Income Decision in Practice
Qualifying is one question. Living with the loan is another. Pull cash out of a home and the balance rises, and so does the monthly obligation. A fixed income does not stretch.
Run a simple check before applying:
- Does the new obligation fit inside your sustainable spending without drawing down the same assets that qualified you?
- Are the qualifying assets still intact after you pay costs, or does the loan use them up?
- If a rental produces cash, what happens when it sits vacant?
- Is the cash-out size needed, or is a smaller amount enough?
Cash-Out, HELOC and Other Routes
| Option | What it does | Fits when |
|---|---|---|
| Cash-out refinance | Replaces the first mortgage and returns cash | Replacing the mortgage still makes sense |
| HELOC | Adds a second lien on a revolving line | You want a smaller, flexible draw |
| Reverse mortgage | Draws on equity with no required monthly payment | Monthly obligations are the pressure point |
| Rate-and-term refinance | Changes the terms without new cash | You do not need cash |
If you are declined, a smaller cash-out, a different path or a different property type may change the result.
Questions to Ask Any Lender
- Which path does my file fit, and why?
- Which of my accounts count, and at what percentage?
- Are cash-out proceeds allowed on this path, and at what leverage?
- What does seasoning look like for my accounts?
- Are there prepayment terms?
Frequently Asked Questions
Do big banks offer asset-based cash-out refinances to retirees?
Rarely as a standard product. Large retail banks mostly underwrite on documented income and debt-to-income, so a retiree with large balances and modest income often does not fit. Specialty and portfolio lenders write these programs, and a broker can compare several at once.
Can I get cash-out with no paycheck?
Possibly, depending on the path and the lender. On the asset depletion path, usable assets divided by 60 months become qualifying income, and cash-out is capped at 60%. Subject to underwriting, every file is fully reviewed.
Does my retirement account count?
Yes, at a percentage. On the qualifier path, retirement accounts count at 90% under 59½ and 100% after. On the depletion path they count at 70% at any age.
Does privately held company stock count?
No. Privately held company stock is not an eligible asset on either path. The route is documented liquid assets, such as seasoned proceeds from a sale.
Is this a no-documentation loan?
No. It skips traditional personal-income documentation, pay stubs and employment verification, but every file is fully underwritten and assets are documented with statements.
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.
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
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
2. Fortra Law, consumer laws that apply to business-purpose loans
3. Doss Law, business purpose exemption simplified
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 With No Income Verification?
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.