The Quick Read: An asset-based cash-out refinance is reviewed against statements instead of your paycheck, and an interest-only period, where a program and lender offer one, lowers the required monthly payment for a set window but never raises your borrowing limit and never reduces your balance.
- Asset-based means two different paths, and you qualify on only one at a time: assets cover the loan outright, or assets convert into monthly income.
- Cash-out leverage is capped by the path and the property, and interest-only does not change that cap.
- Whether an interest-only window is available is set by the lender and program, so confirm it before you plan around it.
- The payment steps up when the window ends, so plan for that date from day one.
- Cash-out proceeds never count as qualifying assets.
What “Asset-Based” Means Here
“Asset-based” gets used three ways online. One meaning is property-cash-flow lending, where the rent drives lender review. Another is short-term hard-money style lending. The third is qualifying on your own liquid balances. This article covers the third.
That is how Lendmire’s asset-based mortgage programs work. You provide no traditional personal-income documentation, pay stubs or employment verification. You do document your assets with statements, and every file is fully underwritten. If you want to see how a rental’s income qualifies a loan instead, Lendmire’s piece Short-Term Rental Cash-Out Refinance Requirements With an Interest-Only Period covers that route.
This fits cash-heavy, income-light households. Think retirees, people who sold a business, and heirs. It also fits early-retired professionals and anyone living off a portfolio. Programs are offered in sixteen states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington.
Two Paths: Which One Fits You
You qualify on one path at a time. Never blend their numbers.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How it works | Assets cover the whole loan | Assets become monthly income |
| Income documented | None | Derived from assets |
| Purchase leverage | Up to 80% | Up to 80% (residence, second home) |
| Refinance leverage | Up to 75% | Up to 80% rate-and-term |
| Cash-out leverage | Set by lender, not published | 60% |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
On the depletion path, an investment property is capped at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Principal residences and second homes carry the other figures above. All figures are subject to underwriting and apply through select programs.
The qualifier path asks one question: do your eligible assets, after credit percentages, equal or exceed the entire loan? The depletion path asks a different one. Can your usable assets, divided by 60 months, carry the housing payment and other debts through the debt-to-income test?
How Underwriting Counts Your Assets
Each account type counts at a set share of its balance.
Qualifier path:
- Brokerage, certificates of deposit, money market and savings count at 100%.
- Retirement accounts count at 90% under age 59½ and 100% at 59½ or older.
- Accounts combine.
Depletion path:
- Cash accounts and certificates of deposit count at 100%.
- Securities count at 80%.
- Retirement accounts count at 70% at any age.
- Real-estate equity counts at 60%.
Here is an illustration; the lender’s own calculation governs. An $800,000 loan with $330,000 in brokerage accounts, $300,000 in a 401(k) under 59½ (90%, or $270,000) and $200,000 in savings counts $800,000 of usable assets. That is reviewed on assets alone, subject to underwriting.
On the depletion path, $1,500,000 in securities (80%, or $1,200,000) plus $300,000 in cash gives $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. It then has to carry the housing payment and other debts.
Some assets do not count on either path. Privately held company stock is not an eligible asset on either path. A founder’s route is documented liquid assets, such as 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 not published as eligible either. The documented route is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Seasoning, Credit and Minimums
Seasoning is the waiting period that proves your money is really yours.
- Qualifier path: 60 days of seasoning and two months of statements per qualifying account. The credit floor is 600.
- Depletion path: statements at least 120 days old at application, plus one within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning. Credit follows the lender’s matrix, and a first-time investor needs 700.
- Depletion minimums: qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan. When assets are your only income source, you need no less than $250,000 in liquid funds.
- Housing history: 0x30x12, with one 30-day late in the last twelve months considered case by case.
A recent housing event needs four years of seasoning on the depletion path. Approval is never promised, and every file is underwritten individually.
Where Interest-Only Fits In
An interest-only period is a stretch at the start of the loan where your payment covers interest and nothing more. The CFPB’s adjustable-rate mortgage handbook describes it this way. You pay smaller monthly amounts and nothing goes toward the balance.
The same booklet makes the key warning: the payment rises when the window ends, even if rates do not change. A longer window means a bigger later increase.
The OCC’s consumer publication on interest-only payments uses a 30-year loan with a five-year window as its example. After year five, the payment rises because principal repayment starts. The remaining 25 years must repay the whole balance.
Here is how that plays out for you:
- The window sits inside the total term. It is not extra time.
- Your balance stays flat during the window, so equity grows only through appreciation or voluntary paydown.
- A cash-out makes the balance larger, so the eventual step-up is larger too.
Whether an interest-only window is available on an asset-based file is decided by the lender and program. It is not a published feature of the figures above, so ask early. Confirm it in writing before you build a plan around it.
What Interest-Only Changes, and What It Doesn’t
| It can change | It does not change |
|---|---|
| Required monthly payment during the window | The leverage cap on your path |
| Monthly cash you keep | Your asset and seasoning requirements |
| Possibly the debt-to-income test on the depletion path | Your credit requirements |
| Your balance, which stays flat |
The depletion path is the only place the test could move. If the lender runs your derived income against the interest-only payment, the ratio improves. If it tests a fully amortizing payment, you get the cash-flow benefit with no qualifying benefit. Lenders in a wholesale network do not all treat this the same way. Ask which payment gets tested.
On the qualifier path, there is no income test at all. Interest-only there only affects the payment you carry afterward. Your assets must still cover the entire loan.
Interest-only also cannot lift proceeds past the cash-out leverage cap. The cap sets your maximum loan, and the loan minus your payoff and costs is your cash.
Clearing the Test vs. Real Cash Flow
Passing a qualification test and keeping money each month are different things. A payment that passes can still leave you thin once taxes, insurance, dues and repairs come out. Take the cash-out for a reason. If you pull cash only to cover the payment gap, you have borrowed against your home to fund a shortfall.
Run a simple break-even. Divide your one-time closing costs by the monthly cash you gain from interest-only. That gives the number of months before the structure pays for itself. If you may sell or refinance before then, it likely does not.
A stress case helps too. Assume expenses rise and income stays flat, then look at the payment after the step-up. If that version of your budget fails, the structure is too tight.
Planning for the Reset
Treat the step-up as the base case, not a surprise. At the end of the window you have four routes:
1. Keep the loan and absorb the higher payment.
2. Pay down principal with a lump sum, if your assets allow.
3. Sell the property.
4. Refinance into a new loan.
A refinance means new underwriting, fresh costs and a new asset review. Your statements need to hold up again. Extending the window generally means a new loan, not an edit to the old one.
Also ask about prepayment terms on the loan you take. An early exit can carry a cost, and that cost eats the savings you were chasing. Check the note for the length of the window and the recast date.
Alternatives to Compare
| Option | Best for | Trade-off |
|---|---|---|
| Rate-and-term refinance | Changing loan terms, no cash taken | No cash released |
| Home equity line | Flexible, repeat access | Adjustable, can be frozen |
| Longer amortization term | Spreading principal over more years | Slower principal paydown |
| Interest-only cash-out | Cash now, with a defined interest-only period | Step-up later, flat balance |
A home equity line is a separate product with its own rules. It is described here only as an alternative. Match the tool to your timeline. If you will hold for decades and want predictability, a longer term often beats a temporary window.
Who Tends to Fit, and Who Doesn’t
Tends to fit when:
- You have large balances, little documented income, and a clear use for the cash.
- You expect a sale, an inheritance or a portfolio distribution before the window ends.
- You can absorb a higher payment without strain.
Tends not to fit when:
- You plan to rely on the lower payment indefinitely.
- You expect to hold only briefly, so closing costs never pay back.
- Your assets would be too thin after the cash-out to refinance or cover the step-up.
Qualification Checklist
- Two months of statements for every qualifying account on the qualifier path, or the 120-day and 45-day statements on the depletion path.
- Proof of the source of any large recent deposit.
- A payoff statement for your current loan.
- An appraisal of the property.
- Proof of homeowners insurance.
- A written note or disclosure that spells out any interest-only length and recast date.
Cash-out proceeds never count as qualifying assets, so do not count on them to meet the minimums. Lenders review everything in underwriting, and none of this is a commitment to lend.
Key Terms Defined
Interest-only period: a stretch at the start of the loan where payments cover interest only.
Recast: the date the payment resets to include principal.
Seasoning: the time funds must sit in your account before they count.
Haircut: the share of an asset’s balance that a lender does not count.
Cash-out refinance: a new, larger loan that pays off the old one and releases the difference as cash.
Debt-to-income ratio: your monthly debts divided by your monthly income, used on the depletion path.
Frequently Asked Questions
Does an interest-only period increase how much cash I get?
No. The leverage cap on your path sets the maximum loan, and interest-only does not change it. It only changes what you pay each month during the window.
Can I extend an interest-only period?
Generally not on the same loan. Extending the window usually means a new loan with fresh underwriting and costs. Confirm the terms in the note before you close.
Does the cash I pull out count toward my assets?
Never. Cash-out proceeds do not count as qualifying assets on either path. Plan your reserves and minimums without them.
Can I use these programs on an investment property?
Yes, on the asset depletion path only. Investment property is capped at 65% on a purchase or rate-and-term refinance and 60% on a cash-out, subject to underwriting. The loan is business-purpose, and the qualifier path is for a principal residence or second home.
Does privately held company stock count?
No. Convert it to documented liquid assets, such as a seasoned cash balance from a sale or buyout.
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. Whatever structure you choose, pick the one you can still afford on the day the interest-only window ends.
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 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
1. CFPB Consumer Handbook on Adjustable-Rate Mortgages
2. OCC Interest-Only Mortgage Payments and Payment-Option ARMs
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 Requirements With No Income Other Than Assets · Asset-Based Cash-Out Refinance Options With Limited Income · Asset-Based Cash-Out Refinance Options to Buy a Rental Using Home Equity and Mutual Funds
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.