The Quick Read: The best program for a medical bill depends on your property, your assets, and how much equity the home carries after the leverage cap. Asset-based programs on a principal residence or second home can fund a cash-out, but only the asset depletion path clearly publishes cash-out terms. Borrowing against the home turns an unsecured bill into a secured debt, so the decision deserves a hard look first.
- Two paths exist: the asset qualifier path (assets cover the whole loan) and the asset depletion path (assets become monthly income).
- On the asset depletion path, a cash-out on a principal residence or second home is capped at 60% loan-to-value, subject to underwriting.
- Cash-out proceeds never count as qualifying assets.
- The property caps the cash you can take, not the size of the bill.
- Fixing the bill first (itemized review, assistance, negotiation) often shrinks the amount you need to borrow.
Lendmire is a mortgage broker. It shops a wholesale network of lenders and matches the file to a program. It does not lend, and nothing here is a commitment to lend.
Key Terms Defined
Cash-out refinance: a new mortgage larger than the old one, with the difference paid to the borrower.
Asset qualifier path: a program where eligible assets, after credit percentages, must equal or exceed the entire loan amount.
Asset depletion path: a program that divides usable assets by 60 months to create a qualifying monthly income.
Haircut: the share of an asset’s balance that a lender will not count.
Loan-to-value (LTV): the loan balance divided by the property’s appraised value.
Seasoning: the length of time funds have sat in an account before they count.
Who This Fits (and Who It Doesn’t)
Asset-based mortgages are built for people with large balances and thin documented income. Think retirees, someone who sold a business, an heir, or a household living off a portfolio. A big medical bill often lands on exactly these households.
If you have a steady paycheck, a conventional cash-out may be a simpler route. If the property is a rental you don’t live in, this article’s consumer-purpose programs are mostly the wrong vehicle for a personal bill. On the asset depletion path, an investment property is eligible only as a business-purpose loan, with a lower leverage cap, and a personal medical bill is not a business use. Business-purpose loans are reviewed differently from a standard owner-occupied mortgage, and the stated purpose of the funds matters.
Programs are placed through select lenders in the network. The 16-state footprint for this consumer program covers Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington.
How Underwriting Treats an Asset-Based Cash-Out
Underwriting starts from the assets, not the paycheck. The file is fully underwritten. You provide no traditional personal-income documentation, pay stubs, or employment verification, but you do document every qualifying account with statements.
Here is how a file moves.
1. Pick the path. A borrower is reviewed on one path at a time. The qualifier path tests whether usable assets cover the whole loan. The depletion path tests whether asset-derived income carries the housing payment and other debts.
2. Document the assets. The qualifier path wants 60 days of seasoning and two months of statements per account. The depletion path wants statements at least 120 days old at application, plus one statement within 45 days.
3. Apply the credit percentages. Each asset type counts at a set share of its balance. More on this below.
4. Size the loan against value. Appraised value and the leverage cap set the ceiling. Cash-out leverage is lower than purchase leverage on every path that publishes it.
5. Run credit and housing history. The qualifier path publishes a 600 minimum score. The depletion path follows the lender’s matrix. Housing history is 0x30x12, and a single 30-day late in the last twelve months is considered case by case.
6. Underwrite and disclose. This is a consumer mortgage, so TRID disclosures apply. Qualification is subject to underwriting and the lender’s own calculation.
The Two Paths Side by Side
| Factor | Asset Qualifier | Asset Depletion |
|---|---|---|
| Core test | Assets cover the entire loan | Assets become monthly income |
| Income documented | None | Derived from assets, runs through DTI |
| Refinance leverage | Up to 75% | 60% cash-out (residence/second home) |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Best fit | Very large liquid balances | Large balances, income to prove |
On the qualifier path, 75% is the refinance ceiling. Whether cash-out proceeds are allowed there, and at what leverage, is set by the lender and is not published. Do not assume a qualifier-path cash-out figure.
On the depletion path, a principal residence or second home allows 80% on a purchase or rate-and-term refinance and 60% on a cash-out.
What Counts as an Asset
Qualifier path. Brokerage accounts, CDs, money market, and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. Accounts combine.
Depletion path. Cash and CDs count at 100%. Securities count at 80%. Retirement accounts count at 70% at any age. Real-estate equity counts at 60%.
Not eligible 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. Privately held company stock is not an eligible asset on either path. Crypto, precious metals, and collectibles 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.
Which Program Is Best for a Medical Bill?
No single program wins. The best program for your situation turns on four things: the property’s occupancy, how much equity remains after the leverage cap, how your assets are held, and your credit profile. A broker that shops several wholesale lenders can match those to a program. A single lender can only offer its own.
Use this if/then logic.
- If your liquid assets exceed the whole loan, the asset qualifier path may fit, because no income is documented. Ask early whether cash-out is available on that path, since the lender sets it.
- If you hold large balances but want income counted, the depletion path publishes the cleanest cash-out terms: 60% on a residence or second home.
- If the equity is thin, the leverage cap may leave less cash than the bill. The property caps the cash, not the bill.
- If your wealth sits in private company stock, none of it counts. Private stock is not eligible on either path. A sale or buyout converted to seasoned cash is the route.
A Worked Example
Take a retired household on the depletion path. Say they hold $1,500,000 in securities, which counts at 80%, or $1,200,000. They also hold $300,000 in cash at 100%. Usable assets total $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income.
That income then carries the housing payment and other debts through the debt-to-income test. The depletion path also needs qualified assets of at least the lesser of $1,000,000 or 1.25 times the loan balance, and never below $250,000 liquid when assets are the only income source.
Now the qualifier path. An $800,000 loan with $330,000 in brokerage accounts (100%), $300,000 in a 401(k) under 59½ (90%, or $270,000), and $200,000 in savings (100%) counts $800,000 of usable assets. That is reviewed on assets alone.
These are illustrations. The lender’s own calculation governs, and every file is subject to underwriting.
What the Lender Does and Doesn’t Ask About the Bill
A consumer cash-out on a principal residence is generally not restricted to a specific use. The lender cares about equity, assets, and credit. It does not typically need to see the medical bill.
Your own paperwork matters more than the bill. A source of funds, a clear statement trail, and seasoned balances are what get reviewed. Cash-out proceeds never count as qualifying assets, so you cannot borrow cash and then count it toward qualifying.
The Investment-Property Trap
Many investors assume a rental property is a bucket of equity they can spend on anything. It is not. A rental loan is a business-purpose loan, and the purpose of the loan controls, not the label on the collateral. Compliance Alliance makes the point that the investment label does not automatically exempt a loan. The regulation looks at the purpose of the loan itself.
The CFPB’s commentary to Regulation Z deems credit to acquire, improve, or maintain non-owner-occupied rental property a business purpose. Paying a personal medical bill is none of those. It would face the general primary-purpose analysis, and a personal use points the wrong way. Misclassifying the loan creates real problems for everyone on the file.
The practical read: use a rental’s equity for the rental business. Use a consumer product on your own home for a personal bill.
Risks Worth Pricing In
An unpaid medical bill usually has no lien on your home. A cash-out changes that. Miss payments on the new mortgage and the home is at risk.
Experian cautions that using a secured loan for medical bills means you could lose your property if you fall behind. CBS News notes that home equity may not be worth using for medical debt when a cheaper option doesn’t put the home on the line.
Other costs to weigh:
- A larger balance on the home for the life of the mortgage.
- Closing costs that reduce net cash.
- A lower equity cushion if values soften.
- Giving up interest-free plans and charity programs that borrowing makes moot.
Before You Borrow
Fix the bill first.
1. Ask for an itemized bill and check it for errors. 2. Apply for the provider’s financial assistance program. 3. Ask about an interest-free payment plan. Experian notes providers may offer no-interest or low-interest plans. 4. Offer a lump-sum payment. Bills.com reports discounts of 10 to 30 percent are common, a consumer-site observation and not a promise. 5. Consider a billing advocate. Yahoo Finance lists advocates among the options.
Also ask the liquidity question. If you have large balances, why borrow against the home at all? Selling or withdrawing assets may carry taxes, penalties, or market-timing costs. Borrowing carries interest and a lien. Neither is free. Tax treatment varies; consult a qualified professional.
Frequently Asked Questions
Do I have to show the lender the medical bill?
Typically no, on a consumer cash-out for a principal residence. The lender reviews equity, assets, and credit rather than the use of funds. Your statements and the source of your balances are what get examined.
Can I use cash-out money to qualify?
No. Cash-out proceeds never count as qualifying assets. Qualification rests on assets that were already seasoned in your accounts.
What if my bill is larger than my equity supports?
The property caps the cash. On the asset depletion path, a cash-out on a principal residence or second home tops out at 60% loan-to-value, subject to underwriting. If the bill exceeds what that leaves, you would need a payment plan, assistance, or another funding source for the rest.
Can I do this with no income?
You can qualify without documented income on the asset qualifier path, but the file is still fully underwritten. You provide no traditional personal-income documentation, pay stubs, or employment verification. You do provide statements for every qualifying account, seasoned for at least 60 days.
Is this the right route for a rental property I don’t live in?
Usually not for a personal bill. Rental financing is business-purpose, and a medical bill is a personal use. The asset depletion path can apply to an investment property, but only as a business-purpose loan, and cash-out limits on an investment property are lower than those for a principal residence or second home.
Next Steps
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 programs based on your statements, the property, credit profile, leverage, and your goals. Terms vary by lender and are subject to underwriting.
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 (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. Compliance Alliance, Regulation Z and Investment Properties
2. CFPB, Regulation Z Comment for 1026.3
3. Experian, How to Get Help With Medical Bills
4. CBS News, Should You Use Home Equity to Pay Medical Bills
5. Bills.com, Negotiate Your Medical Bills
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 Without a Current Job or Paycheck · Best Asset-Based Cash-Out Refinance Program for a Retiree Living on Investments · Best Asset-Based Cash-Out Refinance Program to Fund a Business Expansion
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.