The Quick Read: Big banks rarely write this product in a form a low-income borrower can use, so the realistic route is a mortgage broker that places the file with select wholesale lenders. Those lenders qualify the loan on verified balances instead of paychecks. Every file is still fully underwritten, and the assets are documented with statements.
- Path one, asset qualifier: eligible assets must cover the entire loan, and no employment or income is documented.
- Path two, asset depletion: usable assets divided by 60 months become qualifying income that runs through the debt-to-income test.
- Leverage on a cash-out: the depletion path sets its cash-out ceiling below its purchase and rate-and-term ceilings, subject to underwriting. The exact percentages appear in the depletion section below.
- Equity sets the ceiling, not the qualification: high equity lets you borrow more, but balances prove you can repay.
- Cash-out proceeds never count as qualifying assets.
Picture a retiree with a paid-down home, a large brokerage account and a small pension. A standard lender looks at the pension and declines. A wholesale lender with an asset-based program looks at the brokerage statements and runs a different test. That is the whole idea.
Do Banks Actually Offer This?
Large retail lenders mostly underwrite to tax returns, pay stubs and a debt-to-income ratio. A borrower with big balances and little documented income does not fit that box, even with substantial equity. The asset-based cash-out refinance sits mostly in the non-QM world, which wholesale lenders serve through brokers.
That is why Lendmire does not list or rank institutions. Lendmire is a mortgage broker, not a lender. It works with a network of wholesale cash-out refinance lenders and matches a scenario to a program. The lenders that write this product depend on the property, the credit profile, the leverage you need and what your statements show. The best program for your situation is the one whose asset rules fit your balances.
Market context points the same direction. Conventional lenders have tightened on cash-out refinance and investor loans at times, while non-agency programs have kept serving borrowers who sit outside standard income documentation. That is background only. Program rules below come from the wholesale network’s own guidelines.
Key Terms Defined
Cash-out refinance: a new, larger mortgage that pays off the old loan and any liens, with the borrower receiving the difference.
Asset qualifier: a path where eligible assets, after the credit percentages, must equal or exceed the whole loan amount.
Asset depletion: a path where usable assets divided by 60 months become monthly qualifying income.
Haircut: the part of a balance that does not count. Securities count at 80%, so the haircut is 20%.
Debt-to-income (DTI): monthly debts, including the new housing payment, compared with monthly qualifying income.
Seasoning: how long funds have sat in an account before they can be used.
How Underwriting Treats an Asset-Based File, Step by Step
1. Classify the property and purpose. A principal residence or second home is a consumer-purpose loan. A business-purpose loan on an investment property is available only on the asset depletion path. This choice sets the leverage table.
2. Pick one path. A borrower is qualified on one path at a time. The two tables never blend.
3. Document the assets. The lender relies on account statements. The rule for consumer loans is that a creditor must verify the assets it relies on using third-party records, as laid out in eCFR 12 CFR 1026.43. That is why a low-income borrower still submits paper, just different paper. Expect no traditional personal-income documentation, pay stubs or employment verification, but expect statements.
4. Apply the credit percentages. Each account type counts at a set share of its balance.
5. Run the test. The qualifier path compares usable assets to the whole loan. The depletion path converts usable assets into monthly income and runs the DTI.
6. Appraisal, title and credit. Collateral value, lien position and credit are reviewed like any mortgage. An open HELOC generally has to be paid off in the new loan or subordinated.
7. Underwriting. The file is fully underwritten. Final terms are the lender’s decision, and nothing here is a commitment to lend.
The Asset Qualifier Path
The qualifier path is the simplest to explain. Eligible assets, after the credit percentages, must equal or exceed the entire loan amount. No employment or income is documented, and the lender’s ability-to-repay review rests on the assets.
On this path, loan amounts run up to $4,000,000 through select programs. Leverage tops out at 80% on a purchase and 75% on a refinance of a principal residence or second home. Whether cash-out proceeds are allowed on the qualifier path, and at what leverage, is set by the individual lender and is not published, so a borrower who wants cash-out usually looks hard at the depletion path instead.
Here is how the credit percentages work on the asset qualifier path. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts, meaning 401(k) and IRA balances, count at 90% under age 59½ and 100% at 59½ or older; the asset depletion path treats retirement money differently, as described below. Accounts combine.
To see the qualifier math, take an $800,000 loan. A borrower holds $330,000 in brokerage accounts, which counts at 100% for $330,000. A 401(k) of $300,000, held by a borrower under 59½, counts at 90% for $270,000. Savings of $200,000 count at 100% for $200,000. Adding the three counted amounts gives $800,000 of usable assets, which equals the loan, so the file is reviewed on assets alone, subject to underwriting. The lender’s own calculation governs.
Other requirements: a 600 minimum credit score, 60 days of seasoning, and two months of statements for each qualifying account. Reserves are not required at or below 75% loan-to-value, and above that the lender sets them.
The Asset Depletion Path
Depletion is the path that handles cash-out, and it works differently. Usable assets, after haircuts, are divided by 60 months. The result is monthly qualifying income, and that income must carry the full housing payment and other debts through the DTI test.
Leverage on this path depends on occupancy and transaction:
| Property | Purchase or rate-and-term | Cash-out |
|---|---|---|
| Principal residence or second home | Up to 80% | Up to 60% |
| Investment property | Up to 65% | Up to 60% |
Loan amounts run from $125,000 to $3,500,000 through select programs. Those are ceilings, not offers.
What counts on this path: cash accounts and certificates of deposit at 100%, securities at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Not eligible: 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.
For the depletion math, suppose a borrower holds $1,500,000 in securities, which count at 80% for $1,200,000, and $300,000 in cash, which counts at 100% for $300,000. Together the two counted amounts make $1,500,000 of usable assets. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the new housing payment and other debts under the DTI test. The lender’s calculation governs.
Minimums matter here. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when asset depletion is the only income source. If asset income only supplements documented income, it can do so up to a 45% DTI, and the minimum-assets rule is waived.
Statements must be at least 120 days old at application, plus one statement within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning. Credit follows the lender’s matrix. A first-time investor on this path needs a 700 score. Housing history is 0x30x12, with one 30-day late in the last twelve months reviewed case by case. Multiple bankruptcies are not eligible, and a housing event needs 4 years of seasoning.
The key rule: cash-out proceeds never count as qualifying assets. The money you pull out cannot be the money that proves you can repay.
Comparing the Two Paths
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Divided by 60 months into income |
| Income documented | None | Derived, runs through DTI |
| Cash-out | Lender-set, not published | Up to 60% |
| Investment property | Not available | Available |
| Statements | Two months per account | 120-day-old plus one within 45 days |
A third program often gets confused with these. Bank statement loans suit borrowers who document income through business or personal deposits. Business-purpose rental financing runs through DSCR programs. Neither is the asset route. Lendmire’s piece How Lenders Underwrite a Bank Statement Cash-Out Refinance With High Equity and Low Income covers that other path in full.
Why Equity Alone Doesn’t Qualify You
Here is where many borrowers get it wrong. High equity feels like proof of strength. For a consumer-purpose loan, it is not proof of repayment. The federal ability-to-repay framework lets a creditor rely on income, on assets other than the dwelling that secures the loan, or on both. The home itself cannot be the asset that proves you can repay. Nolo’s plain-English summary lists the eight factors a lender weighs, including income or assets excluding the secured property, employment status, other debts and credit history.
So equity sets how much you can borrow, through the leverage caps above. Balances decide whether you qualify. A borrower with 70% equity and no liquid assets has a leverage ceiling but nothing to qualify on.
Where the General Rule Breaks
Privately held company stock. A founder or shareholder with a large closely held position still has a route: documented liquid assets. That means seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their credit percentages.
Crypto, precious metals and collectibles. These 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 source reviewed by the lender.
Borrowed or pledged funds. Not published as eligible. Cash-out proceeds are the clearest example, since they never count.
Business accounts. Only the borrower’s ownership share is considered, and the rest is excluded.
House-hack rentals. A rental the borrower will occupy can fall under consumer rules even when it looks like an investment. The federal commentary on exempt transactions, CFPB Comment 1026.3, says the purpose is decided case by case, and it sets unit thresholds for owner-occupied rentals. A duplex you will live in is not automatically business-purpose.
Investment property. Only the depletion path serves it, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. Business-purpose does not mean unregulated, because state licensing and other rules can still apply.
What the Decision Looks Like in Practice
Match the path to the balance sheet.
| Your situation | Likely fit |
|---|---|
| Assets cover the whole loan | Asset qualifier |
| Assets are large but loan is larger than they cover | Asset depletion |
| Need cash-out on a home or investment property | Asset depletion at up to 60% |
| Income is documented through deposits | Bank statement program |
| Property income carries the payment | DSCR program |
Think through the trade-offs honestly. Cash-out raises the balance and the payment. If the depletion income barely carries the new obligation, one market dip in a securities account can strain the file. Alternatives exist too: a HELOC, selling part of a portfolio, or a smaller cash-out. A broker can shop several of these side by side.
Documents to Gather
- Two months of statements for each qualifying account on the qualifier path.
- Statements at least 120 days old plus one within 45 days on the depletion path.
- Closing or settlement paperwork showing the source for sale, inheritance or settlement funds.
- Mortgage statement and any HELOC statement on the current lien.
- Homeowners insurance and title information.
- Government ID and credit authorization.
Complete statements, including every page, prevent the most avoidable gaps. 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.
How a Broker Finds the Fit
Because each lender sets its own matrix, the same borrower can look different from one program to the next. A broker shops the scenario across multiple wholesale lenders and matches it to the program whose asset rules fit. Lendmire’s asset-based mortgage programs are placed through select lenders in its network, and consumer 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. Consumer mortgage disclosures apply to these loans.
Retired borrowers with a thin rental sometimes ask whether an investor program fits instead. 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.
Frequently Asked Questions
Do big banks offer asset-based cash-out refinances?
Rarely in a form built for low-income borrowers. Large retail lenders mostly underwrite to documented income. This product is mostly written by non-QM wholesale lenders, and a broker places files with them. The right program depends on your assets, property and credit.
Can I use my home equity to qualify?
No. On a consumer-purpose loan, the home securing the loan cannot be the asset that proves repayment. Equity sets the leverage ceiling. Your statements show you can repay. On the depletion path, equity in other real estate counts at 60%.
Do cash-out proceeds count as assets?
No. Cash-out proceeds never count as qualifying assets on the depletion path. The money you borrow cannot be the money that drives lender review. Your balances must stand on their own, subject to underwriting.
Does this mean no documentation?
No. Every file is fully underwritten. You skip traditional personal-income documentation, pay stubs and employment verification, but assets are documented with statements. The lender verifies what it relies on.
Can I use my private company stock?
No. Privately held company stock is not an eligible asset on either path. Sale or buyout proceeds that have become seasoned cash can count, along with cash, public securities and retirement accounts at their credit percentages.
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 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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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. Nolo ability-to-repay explainer
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 Little Equity · Best Asset-Based Cash-Out Refinance Program for a Retiree Without Employment Income · How Lenders Underwrite an Asset-Based Cash-Out Refinance With No Income Verification
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.