The Quick Read: The right program depends on whether your assets cover the loan outright or have to be converted into qualifying income, and an interest-only window is a lender-level feature you confirm separately, not a built-in part of every asset-based program. Select lenders in Lendmire’s network review these files, subject to underwriting.
- Two paths exist. On the asset qualifier path, eligible assets must equal or exceed the whole loan. On the asset depletion path, usable assets divided by 60 months become qualifying income.
- Cash-out limits differ by path. On the depletion path, cash-out tops out at 60% loan-to-value on a principal residence, second home or investment property. The qualifier path’s cash-out terms are set by the lender and are not published.
- Interest-only is a separate question. The program figures here do not promise a payment window, so you confirm it lender by lender.
- Your income documents stay in the drawer. You skip traditional personal-income documentation, pay stubs and employment verification. Your account statements, however, are fully reviewed.
What Does “Asset-Based” Mean Here?
An asset-based mortgage is reviewed around what you own instead of what you earn. The lender looks at brokerage accounts, savings, certificates of deposit and similar balances. It then asks whether those balances can carry the loan.
The phrase gets used loosely. Some lenders use it for loans secured mainly by the property, like hard-money loans. This article uses it the other way: your documented assets are the basis for approval.
This setup fits a specific reader. Think of a retiree living on a portfolio, someone who sold a business, an heir who received an inheritance, or an early-retired professional. Balances are large, and documented income is small or absent.
For the full program, see Lendmire’s asset-based mortgage program page.
Which Path Fits You: Assets Cover the Loan or Assets Become Income?
You are qualified on one path at a time. Never blend the two sets of rules.
The asset qualifier path is the simpler one. Your eligible assets, after the credit percentages below, must equal or exceed the entire loan amount. No employment or income is documented.
The asset depletion path works differently. Usable assets are divided by 60 months. The result is a monthly qualifying income. That income then has to carry the full housing payment and your other debts through the debt-to-income test.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| Reviewed on | Assets cover the whole loan | Assets divided by 60 months |
| Loan amounts | Up to $4,000,000 | $125,000 to $3,500,000 |
| Cash-out terms | Lender-set, not published | 60% LTV on cash-out |
| Credit | 600 minimum score | The lender’s matrix |
| Statements | 60 days seasoning, two months each | 120-day-old plus one within 45 days |
All figures are ceilings and floors through select programs, subject to underwriting. They are not offers.
How Underwriting Counts Your Assets, Step by Step
Underwriting follows the same basic sequence on both paths. Only the haircuts and the final test change.
1. List the accounts. You gather statements for every account you want counted.
2. Apply the credit percentages. The lender counts only a share of each balance.
3. Check seasoning. The money must have sat in the account long enough.
4. Run the path’s test. Either assets are compared to the loan, or income is derived and run through debt-to-income.
5. Review the property and credit. Appraisal, credit score and housing history are reviewed as on any loan.
What counts on the qualifier path
- Brokerage accounts, certificates of deposit, money market and savings count at 100%.
- 401(k) and IRA balances count at 90% if you are under 59½ and 100% at 59½ or older.
- Accounts combine.
Here is an illustrative example. An $800,000 loan is supported by $330,000 in brokerage accounts (100% counts, so $330,000). Add $300,000 in a 401(k) while under 59½ (90% counts, so $270,000). Add $200,000 in savings (100% counts, so $200,000). That totals $800,000 of usable assets, so the file is reviewed on assets alone. The lender’s own calculation governs.
What counts on the 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%.
Another illustrative example: $1,500,000 in securities counts at 80%, so $1,200,000. Add $300,000 in cash at 100%. Usable assets are $1,500,000. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then carries your housing payment and other debts through the debt-to-income test.
What does not count
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. Funds from non-regulated financial companies are not eligible either.
Privately held company stock is not an eligible asset on either path. Neither are cryptocurrency, precious metals, collectibles or pledged and borrowed funds, since none is published as eligible. The route for those is converting them to a seasoned cash balance in a regulated account. The lender then reviews the source of the funds.
Cash-out proceeds never count as qualifying assets on the depletion path. You cannot borrow against the property and then use that cash to qualify for the same loan.
Where the Interest-Only Period Comes In
An interest-only window means that for the first stretch of the loan, you pay only the interest. The balance does not shrink during that time. When the window ends, the payment is recalculated so the same balance is repaid over the years left.
The OCC’s consumer publication on interest-only mortgages puts the typical window between 3 and 10 years. Its example is a 30-year loan with a 5-year interest-only period. You pay interest only for 5 years, then principal and interest over the next 25. That is a general consumer reference, not a rule for any one program.
Here is the practical point from brokering these files. An interest-only window is a payment structure, not an approval shortcut. It does not change the credit floor, the leverage cap or the asset haircuts. A lender can offer it on one asset-based product and decline it on another.
The program figures for asset-based files do not publish an interest-only length. A given lender may offer a window, may not, or may limit it to certain loan sizes. Because that varies, the honest answer is to ask for it when your file is shopped, not to assume it.
How Interest-Only Affects Qualification Versus Cash-Out Size
These are two separate questions, and people mix them up.
On the qualifier path, the test is assets against the loan amount. A lower early payment does not change that comparison. The loan still must be covered by eligible assets, and cash-out terms are set by the lender.
On the depletion path, the test is derived income against the housing payment and other debts. Here a lower tested payment can matter, because it sits in the debt-to-income math. Whether the lender tests the interest-only payment or the recast payment is a program rule. Ask which one applies before you count on it.
Leverage does not move either way. On the depletion path, cash-out is capped at 60% loan-to-value on a principal residence, second home or investment property. An interest-only window does not lift that cap.
When the Window Closes: Planning the Reset
The recast is where borrowers get surprised. After the window, you pay principal and interest over a shorter remaining term. The payment rises even if nothing else about the loan changes.
The same OCC publication warns that payments may go up substantially after the interest-only period. A consumer warning is not a forecast for your loan, but the direction is certain. The size of the jump depends on the term, the length of the window and the pricing.
The balance also stays flat during the window. Your equity grows only through appreciation or voluntary principal payments. Plan your exit before you sign. You can:
- Pay extra principal during the window.
- Refinance before the recast, if a refinance is available then.
- Sell the property.
- Absorb the higher payment from your income or your portfolio.
Do not assume the second option is open. Credit, values and lender guidelines can change over the window.
Disclosure paperwork also treats the feature plainly. For consumer-purpose loans, Regulation Z’s Loan Estimate rule gives the example label “5 Year Interest Only, Fixed Rate.” Asset-based loans on a principal residence or second home are consumer mortgages, and those disclosures apply. Investment property on the depletion path is a business-purpose loan.
Which Properties and Borrowers Fit
Asset-based cash-out suits borrowers with substantial balances and thin documented income. It suits people who would rather leave their portfolio invested than liquidate it to pay off a mortgage or fund a project.
On the depletion path, an investment property is eligible. Leverage is lower: up to 65% on a purchase or rate-and-term refinance, and 60% on a cash-out. A first-time investor on the depletion path needs a 700 credit score. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The depletion path also carries minimum assets. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must never be below $250,000 in liquid assets when asset depletion is your only income source. If asset income supplements documented income, it can run up to a 45% debt-to-income ratio, and the minimum-assets rule is waived.
Credit matters on both paths. The qualifier path floor is a 600 score. Housing history is 0x30x12, though one 30-day late in the last twelve months is considered case by case. Multiple bankruptcies are not eligible. A housing event needs 4 years of seasoning on the depletion path.
Who Should Look at Other Programs Instead
Asset-based is not the default for every cash-out borrower. Consider the alternatives:
- If your property rents well and your assets are modest, rental coverage is a better basis.
- If you have steady deposits but no traditional personal-income documentation, a bank statement program documents income through deposits.
- If you want a standing credit line, a HELOC works differently.
- If your wealth sits in private company shares, this program cannot count them. The route is documented liquid assets, such as seasoned proceeds from a sale or conversion.
The strongest candidates are those holding balances in brokerage, savings, CD or retirement accounts. The qualifier path pays off most when those balances at least match the loan.
How a Broker Finds the Best Program for Your Situation
No single program is best for everyone. The one that fits depends on your property type, credit profile, leverage need, documentation and goals. Lendmire is a mortgage broker, not a lender. It works with select wholesale lenders and matches your scenario to the program whose guidelines fit.
Lenders differ in meaningful ways. Some publish cash-out terms on the qualifier path and others do not. Some offer an interest-only window and others do not. Overlays on loan size, property type and credit tiers also vary. A broker sees these differences across many lenders. A single lender shows you only its own.
The program is available in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. Outside those states, ask about other loan types.
What to Prepare Before You Apply
- Statements for every account you want counted, with two months of statements for each qualifying account on the qualifier path.
- Proof that funds are seasoned: 60 days on the qualifier path. On the depletion path, statements at least 120 days old plus the most recent one within 45 days. Sale-of-business, inheritance and legal-settlement funds are excused from that seasoning.
- A credit report review so you know where your score and housing history stand.
- A clear plan for the property: the value, the payoff on the existing loan and the amount you want to pull out.
- A written exit plan for the end of any interest-only window.
The assets are documented on both paths. The only thing you skip is income paperwork.
Common Mistakes
- Counting retirement money at full value. On the qualifier path, 401(k) and IRA balances count at 90% under 59½. On the depletion path they count at 70% at any age.
- Mixing the two paths. A figure from one path does not apply to the other.
- Assuming interest-only is included. Ask for it by name when the file is shopped.
- Judging the file by the early payment only. The recast number is the real one.
- Planning around private company stock. Convert it to documented liquid assets first.
Key Terms Defined
Asset qualifier path: The route where eligible assets, after credit percentages, must equal or exceed the whole loan.
Asset depletion path: The route where usable assets divided by 60 months become monthly qualifying income.
Seasoning: The period funds must sit in an account before a lender counts them.
Interest-only period: A stretch at the front of the loan when you pay only interest and the balance stays flat.
Recast: The payment reset at the end of that stretch, when principal repayment begins.
Loan-to-value (LTV): The loan amount as a percentage of the property’s appraised value.
Haircut: The share of an asset’s balance a lender will not count.
Frequently Asked Questions
Can I use privately held company stock to qualify?
No. If you hold shares in a closely held business, the documented route is a sale or buyout converted to a seasoned cash balance. Your public securities and retirement accounts still count at their haircuts.
Does an asset-based cash-out refinance come with an interest-only period?
Not automatically. The published program figures do not include an interest-only length, so it is a lender-level feature you confirm when the file is shopped.
How much can I cash out on the asset depletion path?
On cash-out, the ceiling is 60% loan-to-value on a principal residence, second home or investment property. Rate-and-term refinances and purchases allow more: 80% on a residence or second home and 65% on an investment property. Cash-out proceeds never count toward your qualifying assets.
Do I need tax returns or pay stubs?
No traditional income documentation, pay stubs or employment verification are required on the qualifier path, and no employment or income is documented. Your assets are documented with statements, and the file is fully underwritten. The depletion path derives income from assets and runs it through the debt-to-income test.
Are retirement accounts counted in full?
It depends on the path and on age. On the qualifier path, a 401(k) or IRA counts at 90% under age 59½ and in full, at 100%, from 59½. On the depletion path, retirement accounts count at 70% at any age, so they are not counted in full on that path.
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 options based on your statements, the property, credit profile, leverage, and your goals. Every program is placed through select lenders and subject to underwriting. Nothing here is a commitment to lend.
An interest-only window can make the early years easier, but the reset arrives on schedule, so the sound plan is the one where you already know how the payment gets covered after it.
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 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. OCC – Interest-Only Mortgage Payments and Payment-Option ARMs
2. CFPB – Regulation Z §1026.37
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 for Retirees Living on Fixed Income
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
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.