The Quick Read: An asset-based mortgage is reviewed around what you own, while a bank statement loan is reviewed around what flows through your accounts each month. If your wealth sits in brokerage, savings, or retirement balances and your deposits are lumpy, the asset-based route usually fits. If you have steady, strong deposits and thinner savings, the bank statement route usually fits. Both are subject to lender guidelines and underwriting, and neither is a commitment to lend.
- Asset-based, qualifier path: eligible assets must cover the entire loan, and no employment or income is documented.
- Asset-based, depletion path: usable assets are divided by 60 months to create qualifying income, which then runs through the debt-to-income test.
- Bank statement loan: 12 or 24 months of deposits are turned into income, and your personal debt-to-income ratio still applies.
- Michigan: Lendmire’s consumer mortgage lending is licensed in 16 states, Michigan among them, and the asset-based program figures do not change by state.
- Pure rental purchase: neither product is the usual answer. A DSCR loan, which qualifies primarily on property-level rental income covering the payment, is the better lane.
Which One Is Really for You?
Here is the honest answer. Ask where your financial strength lives. If it lives on your balance sheet, start with the asset-based mortgage. If it lives in your cash flow, start with the bank statement loan.
A Michigan business owner often has both. You may have a company that deposits well in good months and a portfolio from years of saving or a prior sale. In that case, the useful question is which method produces a file a lender can approve at the leverage you want.
One term needs a quick note. “Asset-based lending” in business credit means borrowing against a company’s receivables or inventory. That is a different product. “Asset-based mortgage” here means a home loan qualified on your personal assets, through one of two paths. Brokers sometimes call these asset qualifier and asset depletion, and a borrower is qualified on one path at a time.
Side-by-Side
The asset-based column reflects the figures Lendmire’s network places through select programs, subject to underwriting. The bank statement column shows published industry norms, which vary by lender. Lendmire’s wholesale network places both kinds of loans.
| Factor | Asset-Based Mortgage | Bank Statement Loan (industry norms) |
|---|---|---|
| Reviewed on | Assets alone, or assets turned into income | Deposits turned into income |
| Income documented | None (qualifier); derived (depletion) | Yes, from deposit history |
| Core paperwork | Statements for each qualifying account | Statements, often a CPA letter or P&L |
| Property types | Primary and second home; investment on depletion path | Varies by program |
| Entity vesting | Typically individual; consumer-purpose loan | Program-dependent |
| Seasoning | 60 days (qualifier); aged statements (depletion) | Statement window of 12 or 24 months |
| Reserves | None at or below 75% LTV (qualifier) | Commonly required; lender sets |
| Personal DTI | Not tested (qualifier); tested (depletion) | Tested against deposit income |
Bank statement files lean on your business history. Asset-based files lean on your account balances. The paperwork follows the same split.
How an Asset-Based Mortgage Actually Works
Across Lendmire’s wholesale network, the two asset paths behave like two different loans. Keep them apart in your head.
The asset qualifier path covers the whole loan with eligible assets. After the credit percentages, your usable assets must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000. Leverage runs up to 80% loan-to-value (LTV, the loan as a share of the property’s value) on a purchase and 75% on a refinance, on a principal residence or second home. The credit floor is 600, subject to underwriting.
Here is how the credit works. 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.
Consider an $800,000 loan. Say you hold $330,000 in brokerage accounts (100% counts, 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). That is $800,000 of usable assets, which is reviewed on assets alone. The lender’s own calculation governs.
Seasoning is the waiting period assets must sit before they count. On this path it is 60 days, with two months of statements for each qualifying account. Reserves are not required at or below 75% LTV. Above that, the lender sets them. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
The asset depletion path turns assets into income. Usable assets divided by 60 months become monthly qualifying income. That income must carry the housing payment and your other debts through the debt-to-income test (DTI, your monthly debts as a share of your monthly income).
The haircuts are steeper here. Cash and certificates of deposit count at 100%, securities at 80%, private stock at 75%, retirement accounts at 70% at any age, and real-estate equity at 60%.
Run the numbers on $1,500,000 in securities (80% counts, so $1,200,000) plus $300,000 in cash (100%). That is $1,500,000 usable. Divided by 60 months, it is $25,000 of monthly qualifying income. That figure then has to carry the payment and other debts.
Leverage on this path depends on occupancy and purpose. A principal residence or second home can go up to 80% LTV on a purchase or rate-and-term refinance, and 60% on a cash-out refinance. An investment property is limited to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out. Loans run from $125,000 to $3,500,000. Cash-out proceeds never count as qualifying assets. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The minimums matter. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They can never fall below $250,000 liquid when depletion is your only income source. Statements must be at least 120 days old at application, plus one statement 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 a 700 score.
Asset-derived income can also supplement documented income up to a 45% DTI. When it supplements, the minimum-assets rule is waived.
One point trips people up. Your assets are documented on both paths. Skipping income documentation never means skipping documentation.
How a Bank Statement Loan Works
A bank statement loan builds your income from deposit history. Published norms point to 12 or 24 months of personal or business statements. The lender reviews the deposits, applies an expense factor when business accounts are used, and arrives at a monthly income figure.
A typical package includes every page of consecutive statements. Many lenders also ask for proof of two or more years of self-employment. A CPA letter confirming your business and expense ratio is common. Some programs ask for a profit-and-loss statement. Expect to explain large deposits and irregular activity in writing.
Your personal debts still count. The lender compares the new payment plus your existing obligations against the deposit-derived income. This is the biggest practical difference from the asset qualifier path, where no income is documented.
Ownership share can also matter when business accounts are used. Lenders generally want meaningful ownership in the business whose statements you submit. The threshold is set by the lender, so confirm it before you plan around business accounts. Personal statements may still work when business statements do not.
If you want to go deeper on which accounts to use, Lendmire’s piece How to Use a Personal vs Business Account for a Bank Statement Mortgage walks through it.
When the Asset-Based Mortgage Is the Better Fit
The asset-based mortgage fits when your balances are large and your documented income is not. Some Michigan owners fit this profile cleanly.
- You sold your business. Sale proceeds are exactly the kind of money the depletion path treats well. Sale-of-business funds are excused from the aged-statement seasoning.
- Your deposits are unpredictable. A seasonal or project-based business can show wide swings. Asset balances do not swing the same way, so the file reads more cleanly.
- You want less personal income paperwork. The qualifier path documents no employment or income. The lender’s ability-to-repay review rests on your assets.
- Your business is new. A bank statement loan commonly asks for two years of self-employment. An asset-based file does not turn on business tenure.
- You hold a large share of wealth in securities or retirement accounts. These count toward the loan, though at different percentages by path.
There are tradeoffs. Assets that count are limited. Cryptocurrency, precious metals, collectibles, pledged or borrowed funds, and business accounts beyond your ownership share are not published as eligible on either path. The documented route is converting them to a seasoned cash balance in a regulated account, with the lender reviewing the source. Custodial accounts, deferred compensation, escrow accounts, foreign funds, cash on hand, stock options, and non-vested restricted stock units are not eligible on the depletion path.
Leverage is also lower on the depletion path, especially on cash-out and investment property. Credit matters too, since the qualifier path has a 600 floor. Multiple bankruptcies are not eligible, and a housing event needs four years of seasoning on the depletion path.
When the Bank Statement Loan Is the Better Fit
The bank statement loan fits when your cash flow is the strong story. Maybe your business deposits well, but your wealth is reinvested in the company rather than sitting in accounts.
- Your deposits are strong and steady. Two years of healthy deposits can support an income figure that traditional personal-income documentation understates. Heavy write-offs can shrink taxable income without shrinking cash flow.
- Your liquid assets are thin. The depletion path requires at least the lesser of $1,000,000 or 1.25 times the loan balance in qualified assets. That is a high bar if your money is tied up in the business.
- You have an established business. Two or more years of history, a CPA who can write the letter, and clean statements make a smooth file.
- You want to keep your portfolio untouched. Neither path requires you to sell assets, but the bank statement route does not count them at all. They remain available for reserves.
The tradeoffs are mostly paperwork and exposure. Every page of statements is read. Commingled personal and business accounts need explanation. Large transfers between your own accounts can raise questions. Your personal DTI remains part of the test. Reserves are commonly required, and the lender sets them.
On tax: 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.
What If You Have Both Profiles?
A genuine toss-up is common for a business owner with solid deposits and a solid portfolio. The stronger play depends on the property and the leverage you want.
If you want the highest leverage on a principal residence purchase, the asset qualifier path allows up to 80% on a purchase, but only when eligible assets cover the whole loan. If assets cannot cover the loan but can generate income, the depletion path can run the same 80% on a principal residence purchase. A bank statement loan may allow comparable leverage, but that depends entirely on the lender.
A practical test is to run each method and compare the outputs. Add up usable assets after the percentages and compare that with the loan amount. Divide by 60 for the depletion income. Then total your deposits and apply the expense factor. Whichever method gives you the cleanest approval at the leverage you want is the one to pursue.
One more point: a borrower is qualified on one path at a time. Asset-derived income can supplement documented income on the depletion path up to a 45% DTI, but you do not blend the qualifier table with the depletion table.
Where Rentals Fit
Both products are built around a home you live in or a second home. The depletion path also allows investment property, at lower leverage. If you are buying a pure rental, a third option usually fits better.
Rental purchases are generally treated as business-purpose transactions. The CFPB’s Regulation Z commentary deems credit for non-owner-occupied rental property business-purpose, whatever the number of units. An asset-based loan on a primary residence is a consumer mortgage, and the lender must still make a reasonable repayment determination. The CFPB’s ability-to-repay guide lists bank statements among acceptable income-verification records.
In practice, many owners use one documented-income or asset-based loan for the home and a DSCR loan for each rental. DSCR loans qualify primarily on property-level rental income covering the payment, subject to lender guidelines. They are reviewed differently from a standard owner-occupied mortgage. The sequence matters, and Lendmire’s complete DSCR loans guide explains how that side works.
Mistakes That Derail Both Files
Brokers see the same problems across many lenders’ files.
- Moving money at the wrong time. Transfers between accounts shortly before applying can break seasoning or force extra explanations. Plan moves well ahead.
- Counting assets that do not count. Business accounts beyond your ownership share, crypto, and borrowed funds are common surprises.
- Mixing up the two paths. The qualifier path needs assets to cover the entire loan. The depletion path needs income to pass a DTI test. Using one path’s numbers on the other gives a false picture.
- Assuming no scrutiny. Credit is reviewed, assets are documented, and the lender underwrites every file individually.
- Ignoring liquidity after closing. Even where reserves are not required, a thin cushion leaves you exposed if your business has a slow quarter.
The Verdict
Neither option wins in general. The asset-based mortgage is for the owner whose balance sheet is strong and whose paper income is not. The bank statement loan is for the owner whose deposits tell the strong story. Pure rentals usually belong in a third lane.
The decision comes down to arithmetic. Run usable assets against the loan amount, then run deposits against the debts, and pick the file that holds up. 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. Terms are subject to underwriting, and some options are available only through select programs.
Frequently Asked Questions
Is a bank statement loan the same as an asset-based mortgage?
No. A bank statement loan turns your deposit history into income. An asset-based mortgage uses your balances, either to cover the loan outright or to be divided over 60 months into qualifying income. Both are alternative-documentation loans for borrowers whose traditional personal-income documentation does not tell the full story.
Do I have to sell my investments to use an asset-based mortgage?
No. On both paths the assets are counted, not liquidated. The lender reviews account statements and applies the credit percentages. On the qualifier path, 60 days of seasoning and two months of statements per qualifying account apply, subject to underwriting.
Can I use my business accounts for an asset-based mortgage?
Only to the extent of your ownership share, and even then the program reviews the source. Business accounts beyond your share are not published as eligible. A common route is moving funds into a seasoned personal account at a regulated institution, with enough lead time to season the balance.
Can a Michigan business owner combine both methods?
Not on one loan. A borrower is qualified on one path at a time. On the depletion path, asset-derived income can supplement documented income up to a 45% DTI. A bank statement loan is a separate program with its own rules.
Which is better if I am buying a rental?
Usually neither. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and the property can often be held in an entity depending on program guidelines. The depletion path allows investment property, but at 65% on a purchase and 60% on a cash-out.
Lendmire’s asset-based mortgage in Michigan page presents the program for Michigan borrowers.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging bank statement and other alternative-documentation mortgages — P&L-only, 1099-only and asset-based paths — through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB Regulation Z, Section 1026.3 commentary
2. CFPB Ability-to-Repay and Qualified Mortgage Rule 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: How to Qualify for a Bank Statement or Asset Depletion Loan as a Rental Investor · Asset Qualifier Mortgage vs Bank Statement Mortgage · What Counts as an Asset Statement for a Mortgage?
Guides: Asset-Based Mortgage in Michigan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.