The Quick Read: Asset-based financing lets you qualify for a cash-out refinance on your balances instead of your paychecks, through select lenders in Lendmire’s network, and which of two paths applies decides how much cash you can take and on which kind of property, subject to underwriting. On one path, your eligible assets cover the whole loan. On the other, your assets are converted into a monthly qualifying income. Every file is fully underwritten, and your assets are documented with statements.
- Qualifier path: eligible assets must equal or exceed the entire loan. You document no employment or income, and no traditional personal-income documentation, pay stubs or employment verification are involved.
- Depletion path: usable assets divided by 60 months become qualifying income, and that income runs through a debt-to-income test.
- Cash-out leverage: on the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, a second home or an investment property. On the qualifier path, cash-out terms are set by the lender and are not published.
- Cash-out proceeds never count as qualifying assets.
- Privately held company stock is not an eligible asset on either path.
What Asset-Based Means for a Cash-Out Refinance
You qualify on what you own instead of what you earn. That is the whole idea.
A traditional lender asks for pay stubs, tax returns and an employment history. An asset-based lender asks for statements. If you are retired, sold a business, received an inheritance or a settlement, or live on a portfolio, your balances may be large while your documented income is small. A paycheck-driven file makes that borrower look weaker than they are.
A cash-out refinance replaces your current mortgage with a larger one and pays you the difference. With limited income, the question is how the lender gets comfortable that you can carry the new balance. On these programs, the answer is your assets.
This is also why online advice conflicts. Some pages say asset-based qualifying works for cash-out, and others say it does not. Both can be right, because agency conventional programs and non-agency programs follow different rules. This article covers the non-agency programs that Lendmire, a mortgage broker, arranges through select lenders in its wholesale network. Lendmire does not lend, and every figure below is a ceiling or floor, never an offer. For the program overview, see the asset-based mortgage programs page.
Two Paths, One at a Time
You are qualified on one path at a time, never a blend of both. The table shows the difference.
| Factor | Qualifier path | Depletion path |
|---|---|---|
| How assets are used | Cover the entire loan | Become monthly income |
| Income documented | None | Derived from assets |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Property | Principal residence, second home | Plus investment property |
| Credit floor | 600 minimum | Lender’s matrix |
Pick the qualifier path when your eligible balances are at least as large as the loan. Pick the depletion path when your balances are large but not that large, and you need the income calculation to do the work.
The depletion path carries more tests. It has a minimum asset requirement, a debt-to-income check and a lender score matrix. The qualifier path is simpler, but it needs more assets relative to the loan.
How Underwriting Treats the Qualifier Path, Step by Step
1. Set the loan amount. On a principal residence or second home, this path allows up to 80% loan-to-value on a purchase and 75% on a refinance. Whether cash-out proceeds are allowed on this path, and at what leverage, is decided by the lender, so confirm it before you plan around it.
2. Count your eligible assets. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
3. Compare the total to the loan. Usable assets must equal or exceed the whole loan.
4. Check seasoning. The funds need 60 days of seasoning, and each qualifying account needs two months of statements.
5. Review credit. The published floor is a 600 score. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case.
Here is a worked example, for illustration only. Say you want an $800,000 loan. You hold $330,000 in brokerage accounts, counted at 100%, which is $330,000. You hold $300,000 in a 401(k) at age 55, counted at 90%, which is $270,000. You hold $200,000 in savings, counted at 100%, which is $200,000. That adds up to $800,000 of usable assets, which covers the loan, so the file is reviewed on assets alone. The lender’s own calculation governs.
Reserves work simply on this path. None are required at or below 75% loan-to-value. Above that, the lender sets them.
How Underwriting Treats the Depletion Path, Step by Step
1. Apply the haircuts. Each asset class counts for a share of its balance, shown in the next section.
2. Add up usable assets. This is the total after the haircuts.
3. Divide by 60 months. The result is your monthly qualifying income.
4. Run the debt-to-income test. That income must carry the full housing payment plus your other debts.
5. Check the minimum assets. You need qualified assets of 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.
6. Check statement age. Statements must be at least 120 days old at application, plus one statement within 45 days.
Here is the worked example for this path, again for illustration only. Say you hold $1,500,000 in securities, which counts at 80%, or $1,200,000. You also hold $300,000 in cash, which counts at 100%. That is $1,500,000 usable. Divided by 60 months, it produces $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
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 helps a borrower with a small pension or part-time earnings.
Which Assets Count, and How Much
| Asset | Qualifier path | Depletion path |
|---|---|---|
| Brokerage accounts | 100% | Securities 80% |
| Cash and savings | 100% | 100% |
| Certificates of deposit | 100% | 100% |
| Money market | 100% | 100% (cash accounts) |
| Retirement accounts | 90% under 59½, 100% after | 70% at any age |
| Real-estate equity | Not listed | 60% |
The percentages are the share of the balance that counts. A larger share means a larger usable total.
The depletion path excludes 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, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path.
If you hold those assets, the documented route is to convert them to a seasoned cash balance in a regulated account. The lender reviews the source of those funds.
Where Cash-Out Fits, and Where It Stops
The depletion path is the one with published cash-out numbers. On a principal residence or second home, it allows up to 80% loan-to-value on a purchase or rate-and-term refinance and 60% on a cash-out refinance.
The gap between 80% and 60% on a home is large, and that is the price of taking cash out. Keeping the refinance at rate-and-term leaves more room to borrow against the home.
Two other limits matter. Cash-out proceeds never count as qualifying assets, so you cannot borrow against the home and then count the cash toward qualifying. The minimum-assets test also sizes the loan from the other side. Because it requires qualified assets of 1.25 times the loan balance, or $1,000,000 if that is less, a bigger loan needs more behind it.
Where the Rule Breaks: Edge Cases
Privately held company stock. It is not an eligible asset on either path. If you are a founder or shareholder, the route is documented liquid assets. Those include seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their haircuts.
Sale-of-business, inheritance and settlement funds. On the depletion path, these funds are excused from the 120-day statement seasoning. That helps when the money arrived recently.
Retirement under 59½. The qualifier path counts these balances at 90%. The depletion path counts retirement at 70% at any age, so age changes the answer only on the qualifier path.
Investment property. The depletion path is the only path that allows it. A first-time investor on this path needs a 700 score.
Credit events. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Investment-property loans fall under different consumer rules than a mortgage on your home. The Federal Register’s ability-to-repay rulemaking says investment-purpose loans are considered business-purpose loans. The CFPB’s Truth in Lending overview says credit used to acquire or improve a non-owner-occupied rental is business purpose credit. A loan on your own home is a consumer mortgage.
How the Alternatives Compare
Asset-based is one of several ways to pull cash out when income is thin. Each of these programs follows its own rules, and the notes below describe those programs generally.
| Option | How income is handled | Main trade-off |
|---|---|---|
| Asset-based mortgage | Assets cover the loan or become income | Needs large balances |
| Bank statement loan | Income documented through deposits | Needs steady business deposits |
| DSCR loan | The rental’s income covers the payment | Rental property only |
| Home equity line of credit | Typically income-based review | Often a second lien, with a variable draw |
| Full-doc jumbo | Tax returns and pay documents | Weak when documented income is low |
A bank statement loan fits a self-employed borrower with strong deposits and low taxable income. A DSCR loan fits rental property. If you own a rental and live on a portfolio, you may fit both categories.
Who This Fits
The retiree. You live on Social Security and a portfolio. Your balances are large and your taxable income is small. The qualifier path may fit if your eligible assets cover the loan. If not, the depletion path converts them to income.
The business seller. You sold a company, and the proceeds sit in a brokerage account. Those funds are excused from the depletion path’s statement seasoning, which helps a recent sale.
The inheritance or settlement recipient. You have a lump sum but no work history on paper. Assets give the lender something to underwrite.
The early retiree. You live on a portfolio, with retirement accounts at their haircuts. The depletion path counts those at 70%, while the qualifier path counts them at 90% under 59½ and 100% after.
Risks and When Not to Do It
Think twice if cash-out would use up the assets you need to live on. Counting a balance toward qualifying does not stop you from spending it, and a lender’s usable-assets total says nothing about your own spending needs.
Lower leverage also means less cash back. On a cash-out, the depletion path’s 60% ceiling may leave you with less than you hoped. Ask what you are borrowing for first.
Programs change, and every file is underwritten individually. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Documents to Gather
- Statements for every account you plan to count: two months on the qualifier path, and the age rules above on the depletion path.
- Proof of the source of any recent large deposit.
- Identification and your current mortgage statement.
- Documents for the sale, inheritance or settlement if that is where the funds came from.
- Property documents, such as insurance and the appraisal the lender orders.
Key Terms Defined
Asset qualifier: a path where eligible assets, after credit percentages, must equal or exceed the entire loan.
Asset depletion: a path where usable assets divided by 60 months become monthly qualifying income.
Haircut: the share of an asset’s balance that does not count, so an 80% haircut means only 20% counts.
Seasoning: the time funds must sit in your account before the lender counts them.
Cash-out refinance: a new, larger mortgage that pays off the old one and pays you the difference.
Debt-to-income ratio: your monthly debts divided by your monthly income.
Frequently Asked Questions
Does privately held company stock count as an asset?
A founder or shareholder qualifies through documented liquid assets instead. That means seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their haircuts.
Can I use a retirement account to qualify?
Yes. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and 100% at 59½ or older. On the depletion path, retirement accounts count at 70% at any age. Either way, the lender reviews the statements, and the balance does not have to be withdrawn.
Is this a no-doc loan?
No. You don’t provide traditional personal-income documentation, such as tax returns, pay stubs or employment verification, on the qualifier path. But the file is fully underwritten, and your assets are documented with statements. Credit, the property and the loan terms are all reviewed.
Can I take cash out on an investment property?
Sometimes. Investment property is allowed only on the depletion path, at up to 60% loan-to-value on a cash-out refinance, subject to underwriting. The loan is business-purpose, and a first-time investor on that path needs a 700 score. Cash-out proceeds never count as qualifying assets.
Is this available everywhere?
No. Lendmire’s consumer mortgage lending is licensed in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Outside them, this program is not offered.
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. Reach the team at 828-256-2183. Programs are available through select lenders and are not a commitment to lend.
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
1. Federal Register: Ability-to-Repay and Qualified Mortgage Standards Under the Truth in Lending Act
2. CFPB: Truth in Lending Act overview
This article is part of Lendmire’s asset-based mortgage program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Refinance a Virginia Mortgage After Retiring With No W-2 Income · Asset-Based Cash-Out Refinance Requirements for a Founder Before a Liquidity Event · Can You Take Cash Out of a Texas Homestead on an Asset Depletion Loan?
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.