The Quick Read: The right program depends on which of two asset-based paths fits your balance sheet, and on whether your payoff plan stays inside that path’s cash-out leverage limit. One path drives lender review on assets alone. The other turns assets into monthly qualifying income. Debts secured by the home are paid straight to the lienholders from the new loan, subject to underwriting.
- The asset qualifier path needs eligible assets equal to or above the entire loan. No employment or income is documented.
- The asset depletion path divides usable assets by 60 months to build qualifying income, which then runs through the debt-to-income test.
- On the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, second home or investment property.
- Cash-out proceeds never count as qualifying assets on the depletion path.
- Privately held company stock is not an eligible asset on either path.
These are ceilings and floors from select programs in Lendmire’s wholesale network, not offers. Every file is fully underwritten, and the lender’s own calculation governs.
What Does “Best” Mean for an Asset-Based Cash-Out?
The best program is the one whose asset rules, leverage cap and property rules fit your file. No single program wins for every borrower. Lendmire is a mortgage broker, not a lender. It matches a scenario to the lenders in its network whose guidelines fit.
Five criteria decide the match:
1. Path fit. Do your assets cover the whole loan, or do they need to become income?
2. Cash-out leverage. Will the payoff plus costs fit under the cap?
3. Asset mix. Brokerage and savings count in full. Retirement balances and securities count at haircuts.
4. Seasoning. Are your statements old enough?
5. Property type. Principal residence, second home and investment property follow different leverage rules.
The lenders that write these loans differ on overlays. A broker who sees several guideline sets can steer a file away from a program that will stall it. That is the main value of shopping the file instead of walking into one lender’s door.
This article is written for cash-heavy, income-light borrowers. That includes retirees, people who sold a business, recipients of an inheritance or settlement, early-retired professionals and households living on a portfolio. Balances are large. Documented income is small. Lendmire’s asset-based mortgage programs are built for that profile.
Key Terms Defined
Asset qualifier path: A path where eligible assets, after credit percentages, must equal or exceed the entire loan amount, with no employment or income documented.
Asset depletion path: A path where usable assets divided by 60 months become monthly qualifying income, which must carry the housing payment and other debts.
Cash-out refinance: A new loan that pays off the old debt and returns leftover value to the borrower as cash.
Rate-and-term refinance: A new loan that replaces existing debt without returning meaningful cash to the borrower.
Payoff at closing: Existing liens or debts paid directly from the new loan’s proceeds, shown as named lines on the settlement statement.
Seasoning: The minimum time assets must sit in an account, shown by statements, before they count.
The Two Paths Side by Side
Pick the path first. Every other number hangs off that choice, and a borrower is qualified on one path at a time. Never blend the two columns below.
| Factor | Asset qualifier | Asset depletion |
|---|---|---|
| How assets are used | Must cover the whole loan | Become monthly income (÷ 60) |
| Income documented | None | Derived from assets |
| Purchase leverage, residence or second home | Up to 80% | Up to 80% |
| Refinance leverage, residence or second home | Up to 75% | 80% on rate-and-term |
| Cash-out leverage | Set by the lender, not published | 60% |
| Investment property | Not offered | 65% purchase or rate-and-term; 60% cash-out |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Credit | 600 minimum | The lender’s matrix |
Everything above is subject to underwriting and varies by select program.
Notice the cash-out row. On the qualifier path, whether cash comes back to you, and at what leverage, is the lender’s call and is not published. Do not plan a payoff around a qualifier-path cash-out figure. Confirm it with the lender before you build the plan.
On the depletion path, the 60% cash-out cap is firm across all three occupancy types. That cap is usually what decides whether a debt-payoff plan fits.
What Assets Actually Count?
Each account counts at a percentage of its balance. The percentages differ by path.
Asset qualifier path. Brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts (401(k) and IRA) count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
Asset 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%.
Several things are not eligible on the depletion path. These are 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.
Privately Held Stock
It counts at no percentage. A founder’s or shareholder’s route is documented liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their haircuts.
Crypto and Other Holdings
Cryptocurrency, precious metals, collectibles, business accounts beyond your ownership share, and pledged or borrowed funds are not published as eligible on either path. The documented route is to convert them to a seasoned cash balance in a regulated account. The lender reviews the source of those funds.
How Seasoning and Statements Work
Seasoning is where asset files stall. The assets are documented on both paths. “No income documentation” never means “no documentation.” The program asks for no traditional personal-income documentation, pay stubs or employment verification. It does ask for statements.
On the qualifier path, assets need 60 days of seasoning. Provide two months of statements for each qualifying account. A transfer between accounts that lands inside the window can pull that money out of the count.
On the depletion path, statements must be at least 120 days old at application. You also need the most recent statement dated within 45 days. Funds from the sale of a business, an inheritance or a legal settlement are excused from that seasoning.
Practical habit: pull every statement before you apply. Check for large deposits, account-to-account moves and balances that dipped. Explain those in writing up front, because underwriting asks for explanations on anything that looks unusual.
How Does Paying Off Debt at Closing Work?
Debts secured by the property are paid directly to the lienholders from the new loan’s proceeds. They show up by name on the settlement statement. The CFPB’s integrated disclosure guide shows how payoffs of existing liens are netted into cash to close on consumer mortgages. This program is a consumer mortgage on a principal residence or second home, so TRID disclosures apply.
The sequence usually runs like this:
1. Choose the path. Confirm whether assets cover the loan outright or have to become income.
2. Define the payoff list. List the first mortgage, any second mortgage or HELOC, and any unsecured balances you want cleared.
3. Request payoff demands. The title company orders a payoff demand from each lienholder. Interest accrues daily, so closing-day figures differ from early estimates.
4. Size against the cap. Payoffs, accrued interest, exit fees and closing costs must fit under the leverage ceiling. If they do not, you either bring cash to the table or shrink the plan.
5. Disburse. Lienholders are paid directly from the loan proceeds. Any leftover comes back to you as cash.
6. Reconcile. Check every payoff line on the settlement statement against the demand letters. Settlement reconciliation catches stale payoff figures before they become a problem.
One distinction matters. Paying off a lien on the property can be a rate-and-term refinance if no meaningful cash returns to you. Paying off unsecured debt, such as credit cards, sends money out of the closing for something other than the lien. That makes the file a cash-out transaction, and the cash-out leverage cap and any seasoning rules apply. Lender policies differ on where the line sits. Ask which treatment your payoff list triggers before you commit.
How Does Paying Off Debt Change the Qualifying Picture?
On the qualifier path, no income is documented. The lender’s ability-to-repay review rests on the assets. There are no reserves required at or below 75% loan-to-value. Above that, the lender sets them. Clearing debt at closing mostly matters for your cash flow after the loan, not for the qualifying math. Exact terms depend on lender guidelines, credit profile, reserves, and property review.
On the depletion path, the effect is more direct. Derived income carries the new housing payment and your other debts through the debt-to-income test. Lenders ordinarily set aside debts that are paid off at closing, subject to underwriting. Fewer remaining obligations leave more room in the ratio.
Cash-out proceeds never count as qualifying assets on the depletion path. You cannot pull equity out and then use that cash to qualify for the same loan. The circular math fails by design. If your plan depends on the proceeds to meet the minimum assets, it is not a plan.
Also remember the minimums on the depletion path:
- Qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance.
- Never below $250,000 liquid when asset depletion is your only income source.
- If asset income supplements documented income, it can do so up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Worked Examples
These shapes show how the arithmetic runs. The lender’s own calculation governs.
Qualifier path. Picture a borrower seeking an $800,000 loan. She holds $330,000 in brokerage accounts (100% counts, so $330,000), $300,000 in a 401(k) while under 59½ (90% counts, so $270,000) and $200,000 in savings (100% counts, so $200,000). Usable assets total $800,000. That matches the loan, so she is reviewed on assets alone, subject to seasoning and underwriting.
Depletion path. Say a household holds $1,500,000 in securities and $300,000 in cash. Securities count at 80%, which is $1,200,000. Cash counts at 100%, which is $300,000. Usable assets are $1,500,000. Divide by 60 months and you get $25,000 of monthly qualifying income. That income then carries the housing payment and other debts through the debt-to-income test.
Notice what is absent from both examples. No income documents appear, but every account balance does. That is the trade.
Where the Rules Break: Edge Cases
Investment property. Investment property is financed only on the depletion path. Leverage is 65% on a purchase or rate-and-term refinance and 60% on a cash-out. A first-time investor on this path needs a 700 credit score. Lenders treat the loan as a business-purpose loan. Under Regulation Z’s exempt-transactions rule, business-purpose credit sits outside the consumer disclosure regime, which is why TRID applies to the primary-residence version and not here. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Credit events. Housing history is reviewed at 0x30x12. A single 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. On the depletion path, a housing event needs four years of seasoning.
Right to cancel. On a principal-residence refinance with a new lender, the CFPB explains a three-business-day right of rescission. Experian notes that it does not apply to second homes or investment properties. So the safety net exists on your home and not on the rental. Be sure before you sign.
Retirement-heavy portfolios. Retirement accounts count at 90% or 100% on the qualifier path, depending on age. They count at 70% on the depletion path at any age. A borrower under 59½ with mostly retirement money may see a very different usable total on each path. Run both before you pick.
Loan size. The qualifier path runs up to $4,000,000. The depletion path runs from $125,000 to $3,500,000. Never assume a larger amount is available.
Is Cash-Out the Right Move?
Sometimes it is not. Run through these checks:
- Does it reduce debt? No. It moves debt. Unsecured balances become secured by your home. If you run the cards back up, you now have both.
- Do costs outweigh savings? Compare the closing costs against what you expect to save by consolidating. If the break-even is distant, a rate-and-term refinance or leaving the balance alone may be the better call.
- Is a different structure better? If your existing first mortgage is worth keeping, a home-equity line behind it may be the cleaner route. Compare before you give up a first lien.
- Could you sell assets instead? Many borrowers prefer a loan to avoid liquidating a portfolio. That is a real reason, but weigh it against the new debt.
If you own rental property and want to qualify on the property’s income instead of your assets, that is a different product.
Which Borrower Fits Which Path?
| Borrower profile | Likely fit | Watch for |
|---|---|---|
| Retiree with large savings and brokerage | Qualifier, if assets cover the loan | Seasoning on recent transfers |
| Seller of a business with a fresh cash balance | Depletion, with funds excused from seasoning | Documenting the sale proceeds |
| Founder holding private shares | Private stock is not eligible on either path; the route is seasoned sale proceeds | Documenting the sale or buyout |
| Portfolio-heavy household, modest cash | Depletion | Securities at 80%, retirement at 70% |
| Investor buying or refinancing a rental | Depletion only | 60% cash-out cap, 700 score if first-time |
Match the row to your file before you shop. A file that fits no row cleanly is the one a broker earns their keep on.
Frequently Asked Questions
Does paying off debt at closing hurt my credit?
The new loan involves a credit pull, and a closed account can shift your score either way. Paying off revolving balances usually lowers your utilization, which can help. The lender reviews credit against the program’s score rules: 600 minimum on the qualifier path and the lender’s matrix on the depletion path. The program does not mean no credit check.
Can cash from the refinance count toward qualifying?
No. Qualifying assets must already be in your accounts and seasoned. Plan the payoff so the loan works without the proceeds.
Can I use a 401(k) or IRA?
Yes, at a percentage. On the qualifier path it counts at 90% under age 59½ and at 100% at 59½ or older. On the depletion path it counts at 70% at any age. You are not withdrawing the money. The lender counts the balance.
What if my wealth is in my own company?
Privately held company stock is not an eligible asset on either path. If you sell or are bought out, the proceeds become cash. Seasoned cash in a regulated account counts at 100%. On the depletion path, sale-of-business funds are excused from the 120-day statement seasoning.
Can I pay off debt on an investment property this way?
Only on the depletion path. Cash-out on an investment property is capped at 60% loan-to-value. A first-time investor needs a 700 credit score. Because the loan is business-purpose, consumer disclosure rules differ from the primary-residence version. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
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. 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. Call 828-256-2183 or request a quote. Program details are subject to underwriting and change, and nothing here is a commitment to lend.
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 broker licensed for consumer lending in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages for self-employed and high-net-worth borrowers are arranged through wholesale lenders on primary residences, second homes and investment properties; every file is underwritten by the lender under its program guidelines. 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 — TILA-RESPA Integrated Disclosure guide
2. CFPB — Regulation Z exempt transactions
3. Experian — Right of rescission
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 on an Inherited Property · Best Asset-Based Cash-Out Refinance Program to Pay Off a Second Mortgage
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.