The Quick Read: The best program for your situation depends on one question. Do your eligible assets cover the whole loan, or do they need to become monthly income? Through select programs, one path lets assets cover the loan outright, and the other turns assets into qualifying income over 60 months. Either way, the new loan has to fund before the reset date, and no program promises approval.
- Assets cover the loan: the asset qualifier path documents no employment or income, only assets, and is subject to underwriting.
- Assets become income: the asset depletion path divides usable assets by 60 months, and that income then runs through the debt-to-income test.
- Cash-out is optional: a reset alone is a reason to refinance, not a reason to take cash out, and cash-out is where leverage drops.
- Cash you pull out never counts as an asset toward qualifying on the depletion path.
Key Terms Defined
ARM (adjustable-rate mortgage): a loan whose interest rate is fixed for an introductory period and then changes on a schedule.
Reset: the date the introductory period ends and the lender recalculates your interest rate and payment.
Cash-out refinance: a new loan that pays off the old one and puts extra cash in your hands.
Rate-and-term refinance: a new loan that pays off the old one with no cash back to you.
Asset qualifier path: a way to qualify where eligible assets must equal or exceed the entire loan amount.
Asset depletion path: a way to qualify where eligible assets, after haircuts, become a monthly qualifying income.
Haircut: the share of an asset’s balance that the lender does not count, because the asset could lose value or is hard to reach.
Seasoning: the time funds have sat in your account, which shows the money is really yours.
Which Asset-Based Path Fits an ARM Exit?
Pick the path by comparing your eligible assets to the loan you need. If they cover the full loan, the qualifier path is the cleaner fit. If they do not, but they are large, the depletion path may work. A borrower is qualified on one path at a time, so Lendmire’s job as the broker is to run both and see which fits.
This page covers asset-based mortgage programs arranged through select lenders in Lendmire’s wholesale network. Lendmire is the broker, not the lender. It is licensed for consumer mortgage lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington.
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Become monthly income |
| Income documented | None | Derived from assets |
| Refinance leverage | 75% (home or second home) | See cash-out section |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum score | The lender’s matrix |
| Property types | Home or second home | Also investment property |
All figures are ceilings and floors through select programs, subject to underwriting. They are not offers.
Who fits? These programs are built for a cash-heavy, income-light profile. Think retirees, people who sold a business, recipients of an inheritance or settlement, early-retired professionals, and households living on a portfolio. The balances are large, but the documented income is small or irregular.
If your income is real but runs through business deposits, a different program may suit you better.
How Underwriting Treats Your Assets, Step by Step
Underwriting here is full underwriting. The assets are documented with statements, and the lender reviews credit and the property. What you skip is tax returns, pay stubs, and employment verification on the qualifier path. Nothing about this is no-documentation.
1. Sort your accounts. Group them as brokerage, certificates of deposit, money market, savings, retirement, and real-estate equity.
2. Apply the credit percentages. Each asset counts for only a share of its balance. The share depends on the path.
3. Check seasoning. Statements must show the funds have been in place long enough.
4. Total the usable assets. On the qualifier path, the total must equal or exceed the entire loan. On the depletion path, it is divided by 60.
5. Review credit and housing history. Credit and the property still matter on an asset-based file.
6. Appraisal and property review. The appraisal sets value, and value sets the leverage limit.
What counts on the asset qualifier path
Through select programs, brokerage accounts, certificates of deposit, money market, and savings each count at 100%. Retirement accounts such as a 401(k) or IRA count at 90% if you are under age 59½ and 100% at 59½ or older. Accounts combine.
Seasoning is 60 days, with two months of statements for each qualifying account. The minimum credit score is 600. Reserves are not required at or below 75% loan-to-value, which is the share of the home’s value you borrow. Above that, the lender sets them.
Here is an illustration, and the lender’s own calculation governs. Say the loan is $800,000. You hold $330,000 in brokerage accounts, counted at 100%, so $330,000. You hold $300,000 in a 401(k) and you are under 59½, so 90% gives $270,000. You hold $200,000 in savings at 100%, so $200,000. Together that is $800,000 of usable assets, which covers the loan on assets alone.
What counts on the asset depletion path
Cash accounts and certificates of deposit count at 100%. Securities count at 80%, retirement accounts at 70% at any age, and real-estate equity at 60%. Statements must be at least 120 days old at application, plus one statement within the last 45 days. Funds from the sale of a business, an inheritance, or a legal settlement are excused from that seasoning.
The program has minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never fall below $250,000 in liquid assets when depletion is your only income source. If asset income only supplements documented income, the minimum-assets rule is waived, and total debt-to-income is capped at 45%.
An illustration, again governed by the lender’s own calculation. Say you hold $1,500,000 in securities, counted at 80%, so $1,200,000. You also hold $300,000 in cash at 100%, so $300,000. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then has to carry the housing payment and your other debts through the debt-to-income test.
Should You Take Cash Out, or Just Pay Off the ARM?
If escaping the reset is your only goal, a payoff-only refinance is usually the cleaner tool. A cash-out loan is a bigger loan, and a bigger loan means more to qualify for. Try this test: strip the cash out of your plan and ask whether the refinance still makes sense. If it does, take the simpler loan.
Leverage is the main reason. Here is how the ceilings compare through select programs, subject to underwriting.
| Path and property | Payoff only | Cash-out |
|---|---|---|
| Qualifier, home or second home | 75% on a refinance | Lender-set, not published |
| Depletion, home or second home | 80% | 60% |
| Depletion, investment property | 65% | 60% |
Cash-out on the qualifier path is decided lender by lender, and the figure is not published. Do not plan around a number until a lender confirms one in writing. Some asset-based programs exclude cash-out entirely, so confirm eligibility before you build a plan around it.
One more rule matters on the depletion path. Cash-out proceeds never count as qualifying assets. You cannot borrow cash and then use it to qualify for the same loan.
When does cash-out earn its place? Think of an investor with a rental whose ARM is resetting, who also wants cash for the next purchase. The ARM exit and the cash can come from one loan. The cost is lower leverage, a bigger balance, and a tighter test on the depletion path. A payoff-only loan costs you less leverage but leaves your cash needs unmet.
Where the General Rule Breaks
The rules above hold for most files. These edge cases are where they bend or stop.
Privately held company stock. None of it counts: privately held company stock is not an eligible asset on either path. Founders and shareholders often hold most of their wealth this way. The route that works is documented liquid assets. That means seasoned proceeds from a sale or buyout, cash, public securities, and retirement accounts at their haircuts.
Cryptocurrency, 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. The lender reviews the source of those funds.
Other ineligible assets. On the depletion path, 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 do not count. Pledged or borrowed funds do not count either.
Retirement accounts under 59½. They count at 90% on the qualifier path but only 70% on the depletion path at any age. The same account can look very different depending on the path.
Investment property. If the ARM sits on a rental, only the depletion path applies. That loan is business-purpose, with leverage of 65% on a payoff-only refinance and 60% on a cash-out. A first-time investor on the depletion path needs a 700 score. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Credit events. Housing history is reviewed at 0x30x12, and one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs four years of seasoning on the depletion path.
Prepayment penalties. Many investor loans carry a prepayment penalty, which is often a step-down charge over several years. A consumer ARM on a home usually has none. If your reset falls inside the penalty window, refinancing before the reset can become an expensive plan. Read the note first.
Stacked resets. An interest-only period ending in the same window as the ARM adjustment doubles the pressure. Cash back at a balloon payoff is generally treated as cash-out, so plan for the lower cash-out leverage.
Several properties. Each property is tested on its own value, and the same pool of assets cannot be counted twice.
Why the Reset Deadline Is Real
The reset is not a soft target. When the introductory period ends, the lender adds the index and margin to set a new rate, subject to caps. The index moves with market conditions, and the margin is the fixed amount the lender adds. The CFPB explains how rate caps work. The initial adjustment cap is commonly two or five percentage points. Later adjustments are most commonly capped at one or two points, and the lifetime cap is most commonly five points above the starting rate.
That first jump is what the CFPB’s ARM handbook calls payment shock. The handbook also notes that a starting rate below the fully indexed rate is a discounted, or teaser, rate. In plain terms, the payment you have been making may not be the payment you will be making.
None of this means you can always refinance in time. Nothing promises approval, and the new loan must fund before the reset date. The new loan also stands on its own. The old ARM payment, before or after the reset, does not enter the new loan’s test. What matters is your credit, your assets, and the property.
The Countdown: What to Do Before the Reset
Work backward from the reset date. Each stage gives problems room to surface before they become expensive.
1. Pull your note. Find the reset date, the index, the margin, the caps, and any prepayment clause.
2. Decide payoff-only or cash-out. Use the strip-out test above.
3. Gather statements. You need two months for each account on the qualifier path. On the depletion path, you need statements 120 days old plus one within 45 days.
4. Move odd assets early. If part of your wealth is crypto, metals, or business proceeds, convert and season it now.
5. Talk to a broker. Lendmire matches your scenario to the program that fits and shops more than one lender.
6. Order the appraisal. Value sets the leverage limit, and a low appraisal changes your options.
7. Close the payoff. The old note is paid in full, including any prepayment charge.
Standard consumer-mortgage disclosures apply to this loan. Start well before the reset, because a new underwriting event needs room to fix problems.
What Can Derail the File
- A low appraisal. A value dip can shrink the loan you can refinance into.
- Assets that do not season. Moving money between accounts late can reset the clock.
- An ineligible asset in your total. Take it out of the math before the lender does.
- A credit event. Late housing payments or a recent housing event can end the file.
- Prepayment charges. They can turn a smart refinance into a costly one.
- Waiting too long. The earlier you start, the more options remain open.
Alternatives Side by Side
A refinance is not your only exit. Comparisons below describe each option’s own rules, not this program’s.
| Option | What it does | Fits when |
|---|---|---|
| Payoff-only refinance | Replaces ARM, no cash back | Reset is the only problem |
| Cash-out refinance | Replaces ARM, cash back | You need funds too |
| Pay down or pay off | Uses your cash on the balance | You have idle cash |
| Home equity line | Separate loan on equity | You keep the ARM in place |
| Sell | Ends the loan with proceeds | You no longer want the asset |
| Keep the ARM | Accepts the reset | Reset caps still fit your budget |
If you cannot qualify or cannot afford the new payment, the fallback order is simple. Talk to your current servicer early about options. Next, consider paying down the balance with cash you already hold. After that, consider a sale. A sale ends the problem, but it also ends any income the property produces.
Another ARM instead of a fixed loan fits only when you have a defined sale or refinance date inside the new fixed window. A second ARM restarts the same question later.
Frequently Asked Questions
Can I refinance after my ARM has already reset?
Yes, you can apply after the reset, but the clock is already costing you. The adjusted payment starts immediately, so every month of delay is paid at the new level. Qualification on assets works the same way after the reset. The advantage of moving before it is leverage and time to fix problems.
Do the cash-out proceeds count toward qualifying?
No. On the depletion path, cash-out proceeds never count as qualifying assets. The lender looks at the assets you held before the loan. Plan your qualification around your existing seasoned accounts, not the money the new loan would release.
Does my credit still matter?
Yes. Asset-based does not mean no credit check. The qualifier path has a 600 minimum score, and the depletion path follows the lender’s matrix. Housing history is reviewed at 0x30x12, and approval is never promised.
Can I count my company’s privately held stock?
If you sold or were bought out, the proceeds can qualify once converted to a seasoned cash balance. Cash, public securities, and retirement accounts count at their haircuts.
Is there one best program for everyone?
No. The program that fits depends on your assets, the property type, your credit profile, how much leverage you need, and your reset date. A broker that shops multiple wholesale lenders can compare programs against your statements, which a single lender cannot do.
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. A reset date is easier to meet when you start from the paperwork you already hold.
A deeper walk-through of investment-property equity extraction lives in 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 – What are rate caps with an adjustable-rate mortgage and how do they work
2. CFPB – Consumer Handbook on Adjustable-Rate Mortgages
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 in Retirement Without a Regular Paycheck · Best Asset-Based Cash-Out Refinance Program When Your Income Is Lower Than Before · Best Asset-Based Cash-Out Refinance Program Using a Brokerage Account to Qualify
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.