The Quick Read: Start by picking the path. Under the asset depletion path, retirement accounts count at 70% of the balance, are converted into monthly qualifying income, and the loan is sized at up to 60% loan-to-value on a cash-out, subject to underwriting. Then document the accounts with statements and apply through select programs.
- Two paths, one at a time. The asset qualifier path covers the whole loan with eligible assets. The asset depletion path divides usable assets by 60 months into qualifying income.
- Retirement credit differs by path. The qualifier path counts employer retirement plan and IRA balances at 90% under age 59½ and 100% at 59½ or older. The depletion path counts them at 70% at any age.
- Cash-out lives on the depletion path. It allows up to 60% loan-to-value on a cash-out refinance, on a principal residence, second home or investment property.
- Cash-out proceeds never count as qualifying assets.
- The file is fully underwritten. The assets are documented with statements. There is no traditional personal-income documentation: no pay stubs or employment verification.
If you hold large balances in retirement accounts and show little paycheck income, this loan may fit. Qualifying does not require you to withdraw from the account. Everything here is subject to underwriting and the lender’s own calculation.
What Is an Asset-Based Cash-Out Refinance?
An asset-based cash-out refinance replaces your current mortgage with a larger one and pays you the difference. The qualification rests on your assets, not on a paycheck. It is a consumer mortgage when the home is your residence or second home, and the lender still reviews credit, the property and the assets.
The program runs on two paths: the asset qualifier path and the asset depletion path. Lendmire arranges these asset-based mortgage programs as a broker, placing files with select lenders. Lendmire does not lend, underwrite or approve. The lender does.
Here is the catch on the word “cash-out.” The qualifier path publishes no cash-out leverage figure, so the lender decides that file by file. The depletion path publishes clear cash-out limits.
Key Terms Defined
- Asset qualifier path: eligible assets, after credit percentages, equal or exceed the entire loan, and no income is documented.
- Asset depletion path: usable assets divided by 60 months become monthly qualifying income.
- Haircut: the part of a balance that does not count. A 70% credit on retirement accounts means a 30% haircut.
- Seasoning: how long funds have sat in the account, shown by statements.
- Debt-to-income (DTI): monthly debts, including the new housing payment, compared with qualifying income.
- Cash-out refinance: a new mortgage larger than the payoff, with the difference paid to you.
Which Path Fits You?
Pick the qualifier path if your eligible assets can cover the entire loan amount. Pick the depletion path if the assets are better used as income that carries the payment. A borrower is reviewed on one path at a time, and the figures never blend.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How it qualifies | Assets cover the whole loan | Assets ÷ 60 = income |
| Income documented | None | Derived income, DTI test |
| Retirement credit | 90% under 59½; 100% at 59½+ | 70% at any age |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term (65% for investment property); 60% cash-out (residence, second home or investment property) |
| Cash-out | Set by lender, not published | 60% on residence, second home or investment |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Occupancy | Residence or second home | Also investment property |
If your balances are large relative to the loan, the qualifier path is cleaner. If you want cash out, the depletion path is the one that publishes a cash-out limit. Ask for both reads on the same statements. All figures are ceilings and floors, never offers, and are available through select programs subject to underwriting.
How Do Retirement Accounts Count?
Retirement accounts count at a share of the balance that depends on the path. On the qualifier path, 401(k) and IRA balances count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, they count at 70% at any age.
Why the discount? A distribution taken before 59½ generally carries a 10% additional tax on top of regular income tax, per IRS Topic 557. Lenders discount for the cost of reaching the money. Counting a balance in underwriting is not a withdrawal. You do not liquidate the account to qualify. Tax treatment varies; consult a qualified professional.
The full asset credit table for each path:
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| Certificates of deposit | 100% | 100% |
| Money market, savings | 100% | Cash accounts 100% |
| 401(k) and IRA | 90% under 59½; 100% after | 70% any age |
| Real-estate equity | Not listed | 60% |
The accounts must be vested and accessible to you. Accounts combine on the qualifier path, so brokerage, savings and a 401(k) can stack toward the loan amount.
What Does Not Count?
Several asset types are not eligible. Privately held company stock is not an eligible asset on either path. Stock options and non-vested restricted stock units are out on the depletion path. So are custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand and funds from non-regulated financial companies.
Cryptocurrency, precious metals, collectibles and pledged or borrowed funds are not published as eligible on either path. For these assets and for private company stock, the documented route is a sale, buyout or conversion into a seasoned cash balance in a regulated account, with the source reviewed by the lender.
A founder’s route is documented liquid assets. That means seasoned proceeds from a sale or conversion, public securities and retirement accounts at their credit percentages.
One more exclusion matters for cash-out. Money borrowed against the home cannot be counted to qualify for the same loan, and underwriting will find that double-counting.
Worked Examples
These shapes use the program percentages and the 60-month divisor. The lender’s own calculation governs.
Qualifier path. Picture a borrower seeking an $800,000 loan. She holds $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) at age 55 (90% counts, so $270,000) and $200,000 in savings (100% counts, so $200,000). Usable assets total $800,000. That equals the loan, so she is reviewed on assets alone, subject to underwriting. Note that the 401(k) credit rises to 100% once she turns 59½.
Depletion path. Say you own $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets are $1,500,000. Divide by 60 months and the result is $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the DTI test.
On the depletion path, an early retiree should note that retirement accounts count at 70% at any age. Age does not change the depletion credit, though it changes the qualifier credit.
Depletion Path Minimums
The depletion path carries asset floors. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. When asset depletion is your only income source, you also need at least $250,000 liquid.
Asset income can supplement documented income, such as a pension or part-time pay, up to a 45% DTI. When it supplements, the minimum-assets rule is waived. That helps a household with some income and a mid-sized portfolio.
Credit, Leverage and Loan Size
The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s score and loan-amount matrix. A first-time investor on the depletion path needs 700.
Housing history is 0x30x12. One 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Leverage for a refinance:
- Qualifier path: up to 75% loan-to-value on a refinance.
- Depletion path, residence or second home: up to 80% on a rate-and-term refinance and 60% on a cash-out.
- Depletion path, investment property: up to 65% on a rate-and-term refinance and 60% on a cash-out. The investment loan is business-purpose.
Reserves on the qualifier path are none required at or below 75% loan-to-value. Above that, the lender sets them. The depletion path has no published reserve months. All of this is subject to underwriting.
How Underwriting Treats the File
The lender must make a reasonable, good-faith determination that you can repay. The CFPB’s ability-to-repay provision says so for covered consumer loans, and it does not set comprehensive underwriting standards. The eCFR text of 12 CFR 1026.43 lets a creditor consider income or assets. In practice that is why a file can rest on assets, so long as the lender verifies the assets it relies on.
On the qualifier path, no income is documented, and the ability-to-repay review rests on the assets. On the depletion path, the derived income runs through the DTI test. Both are fully underwritten. Consumer disclosures apply to these mortgages.
How to Apply, Step by Step
1. Choose the path. Decide whether assets cover the loan outright or become income. Ask for both reads if the numbers are close.
2. Sort the accounts. List each account, its type, its owner and its vested balance. Drop anything on the not-eligible list.
3. Check seasoning. The qualifier path needs 60 days of seasoning and two months of statements per qualifying account. The depletion path needs 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 the depletion seasoning.
4. Gather the documents. Collect full statements with every page, ownership proof and vesting proof for retirement accounts. Add a photo ID, the current mortgage statement and homeowners insurance.
5. Run the math. Apply the credit percentages. On the qualifier path, compare usable assets with the full loan. On the depletion path, divide by 60 and test DTI.
6. Submit through a broker. The broker places the file with a select lender whose guidelines fit the path, leverage and occupancy.
7. Respond to underwriting. The lender verifies assets, credit, title and the appraisal. Expect questions on large recent deposits. Answer them with source documents.
8. Review the closing figures. Payoff, costs and any required holdbacks come out of the new loan before cash reaches you. Consumer disclosures apply.
Documents to Gather
| Document | Why it is needed | Common mistake |
|---|---|---|
| Account statements, all pages | Proves balance and seasoning | Missing pages |
| Vesting and ownership proof | Shows access to retirement funds | Non-vested balances |
| Source of large deposits | Confirms funds are yours | Unexplained transfers |
| Credit authorization | Sets credit review | Stale or thin credit |
| Mortgage and insurance statements | Payoff and property file | Outdated payoff |
Where the Rule Breaks
Under 59½. The qualifier path counts retirement at 90% instead of 100%. The depletion path does not change with age. Neither requires you to take a distribution.
Market drop before closing. Securities and retirement balances move with markets. A drop between application and closing lowers the usable figure, and the lender’s calculation uses the statement it reviews. Leave margin in the numbers.
Roth versus traditional. The program percentages above are stated for retirement accounts as a class. The lender confirms treatment of the specific account type.
Stale statements. On the depletion path, statements older than the stated windows fail the seasoning test even if the balance is large.
Assets that are not liquid. Business equity, crypto and private stock must be converted to a seasoned cash balance first.
Not the right tool. If your documented income is strong, a standard income-based loan may price and size better. If you want cash-out on a rental you qualify for by rent, a different investor product may fit. This program is for balances that are large and income that is not.
Common Mistakes
- Counting cash-out proceeds toward qualifying assets.
- Submitting statements with missing pages.
- Mixing the qualifier and depletion tables in one calculation.
- Assuming the qualifier path publishes a cash-out ceiling. It does not.
- Moving money between accounts without a paper trail before applying.
- Treating counted retirement balances as money you must withdraw.
Frequently Asked Questions
Can I use my 401(k) or IRA for a cash-out refinance?
Yes, on the asset depletion path, where retirement accounts count at 70% of the balance and feed monthly qualifying income. On the qualifier path, they count at 90% under 59½ and 100% after, though cash-out terms there are set by the lender. Everything is subject to underwriting.
Do I have to withdraw money from the account?
No. The lender counts the vested balance, which is not a distribution. The IRS 10% additional tax applies to actual early distributions, per IRS Topic 557.
Do I need income to qualify?
Not on the qualifier path, where no employment or income is documented, only the assets. On the depletion path, the assets are converted into income. You still provide statements and credit, with no traditional personal-income documentation, pay stubs or employment verification.
Can cash-out proceeds help me qualify?
No. Cash-out proceeds never count as qualifying assets. Qualifying assets must already be in your accounts and seasoned.
How much cash-out can I take?
On the depletion path, up to 60% loan-to-value on a residence, second home or investment property, subject to underwriting and the asset minimums. The qualifier path’s cash-out limit is set by the lender and is not published.
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. The program is consumer lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Not a commitment to lend.
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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References
1. IRS Topic 557, Tax on Early Distributions
2. CFPB Regulation Z § 1026.43
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 Minimal Documentation to Qualify · How to Qualify and Apply for an Asset-Based Cash-Out Refinance on a Primary Home · How to Qualify and Apply for an Asset-Based Cash-Out Refinance With Tax Return Losses
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.