The Quick Read: Closing costs can be financed inside a new asset-based loan through select programs, but they use the same leverage ceiling as your cash-out, enlarge the balance your assets or derived income must support, and reduce the cash you actually receive, so the right program depends on which asset path fits you.
- Two paths exist. On the asset qualifier path, eligible assets must cover the entire loan. On the asset depletion path, assets are turned into monthly qualifying income.
- Rolling costs in is not free. It raises the balance, and a bigger balance asks more of your assets or your derived income.
- The ceiling is shared. Financed costs and cash-out proceeds compete for the same room under the leverage cap.
- Traditional personal-income documentation is not the focus. These programs do not rely on pay stubs or employment verification, yet every file is still fully underwritten, and your assets are documented with statements.
If you are cash-heavy and income-light, this page walks through how it works from start to finish. You may be a retiree, a business seller, an heir, or a household living on a portfolio. Lendmire is a mortgage broker, not a lender. It places files with select lenders in its network, and every figure here is subject to underwriting.
What “Asset-Based” Actually Means
Asset-based means the lender reviews your file on what you own instead of what you earn. Inside that idea sit two different paths. A borrower is qualified on one path at a time, and the figures never blend.
The asset qualifier path is the simpler one. After the credit percentages below, your eligible assets must equal or exceed the entire loan amount. No employment or income is documented. Loans run up to $4,000,000, with a 600 minimum credit score, through select programs.
The asset depletion path works differently. Usable assets, after haircuts, are divided by 60 months into a monthly qualifying income. That income must carry the full housing payment and your other debts through the debt-to-income test. Loans run from $125,000 to $3,500,000, and the lender’s own score matrix applies.
You can read more about the structure in Lendmire’s asset-based mortgage programs. The cash-out question is where the two paths split most sharply.
How Underwriting Treats the Cash-Out, Step by Step
Underwriting treats a cash-out as a bigger loan that must still be supported by your assets. Here is the sequence, in plain order.
1. The appraisal sets the value. Every leverage cap applies to the appraised value of the home.
2. The old mortgage gets paid off first. The new loan clears the existing balance before you see any cash.
3. Costs are added if you choose to roll them in. Financed costs go into the new loan amount, so the total loan is payoff plus costs plus your cash.
4. The total is tested against the ceiling. The whole balance, rolled-in costs included, must sit under the leverage cap for your path.
5. Your assets are tested against the total. On the qualifier path, usable assets must cover the whole loan. On the depletion path, derived income must carry the new payment.
6. Seasoning and statements are checked. The qualifier path wants 60 days of seasoning and two months of statements per qualifying account. The depletion path wants statements at least 120 days old plus the most recent one within 45 days.
Here is the formula for the cash you receive: new loan, minus old payoff, minus any costs you do not roll in, minus any prepayment charge on the old loan. Rolling costs in does not raise the maximum loan. It changes where the costs come from, which is your proceeds.
Cash-out proceeds never count as qualifying assets on the depletion path. You cannot pull cash out and then use it to prove you qualify.
Key Terms Defined
Cash-out refinance: A new mortgage that pays off the old one and leaves you the difference in cash.
Rolled-in closing costs: Fees added to the new loan balance instead of paid at the table.
Usable assets: Your account balances after each asset type is reduced by its credit percentage or haircut.
Leverage ceiling: The highest share of appraised value the new loan can reach on your path and property type.
Seasoning: The length of time funds must sit in an account, shown by statements, before they count.
Payoff-only refinance: A refinance that pays off the old loan and costs, with no meaningful cash left over for you.
What Makes a Program the Best Fit
The best program for your situation is the one whose path, leverage and asset rules match your balance sheet. No single lender or program wins for everyone. Because Lendmire shops a network of wholesale lenders, the job is matching the file to the program instead of recommending a name.
Five questions drive the match:
- Do your eligible assets cover the whole loan, or do they work better as income?
- Is the home your principal residence, a second home, or an investment property?
- How much cash do you actually need, beyond the payoff?
- How much cash can you bring to the table for costs?
- Is your credit profile inside the path’s published floor or matrix?
| Factor | Asset Qualifier Path | Asset Depletion Path |
|---|---|---|
| How assets are used | Must cover whole loan | Become monthly income |
| Income documented | None | Derived income, DTI test |
| Refinance leverage | Up to 75%, primary or second home | 80% rate-and-term, primary or second home |
| Cash-out leverage | Set by the lender | 60%, any occupancy |
| Investment property | Not offered | Up to 65% rate-and-term, 60% cash-out |
| Loan size | Up to $4,000,000 | $125,000 to $3,500,000 |
On the qualifier path, whether cash-out proceeds are allowed, and at what leverage, is set by the lender and is not published. Anyone quoting you a fixed qualifier-path cash-out figure is guessing. All figures here are ceilings and floors, never offers, and each lender’s own calculation governs.
What Counts as an Asset, and at What Weight
On the qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% if you are under 59½ and 100% at 59½ or older. Accounts combine.
On the 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%.
Privately held company stock is not an eligible asset on either path. Cryptocurrency, precious metals, collectibles, pledged funds and borrowed funds are not published as eligible either. The documented route for all of these is converting them to a seasoned cash balance in a regulated account, with the source reviewed by the lender.
Three Ways to Handle Closing Costs
You have three routes, and each changes a different number. The route you pick does not change the leverage ceiling, but it changes who uses up the room under it.
| Route | Cash You Bring | New Balance | Cash You Receive |
|---|---|---|---|
| Pay at closing | Costs | Smaller | Full cash-out |
| Deduct from proceeds | None | Same as pay route | Reduced by costs |
| Roll into the balance | None | Larger | Reduced by costs |
A fourth option, covered by pricing, exists. The lender covers some costs in exchange for different loan pricing, which the CFPB’s explanation of lender credits and points describes as a trade between up-front cost and the cost of the loan. Pricing is set by each lender and is not discussed here.
The rolled-in route looks easiest because you write no check. The cost is real, though. You pay interest on those fees for as long as the loan lasts. On the depletion path, the payment rises and eats into the income your assets generate. On the qualifier path, the bigger loan must still be covered by assets.
Where Rolling In Stops
Rolling costs in stops at the leverage ceiling and at your asset coverage. Think of the ceiling as a fixed amount of room. Your payoff uses some, your cash-out uses some, and financed costs use the rest.
Suppose, as an illustration only, that your payoff sits at 50% of appraised value and the path’s cash-out ceiling is 60%. That leaves ten percentage points of value for both cash-out and costs. Every slice of that room spent on fees is a slice you do not receive. If the appraisal comes in light, the room shrinks again, and you either bring cash or take a smaller loan.
Asset coverage is the second wall. Take the qualifier example: an $800,000 loan backed by $330,000 in brokerage accounts (100% = $330,000), $300,000 in a 401(k) under 59½ (90% = $270,000) and $200,000 in savings (100% = $200,000). That counts $800,000 of usable assets and is reviewed on assets alone. Add financed costs and the loan climbs above $800,000, so the same assets fall short. You would need more eligible assets, a smaller loan, or costs paid out of pocket.
The depletion example works the same way. $1,500,000 in securities (80% = $1,200,000) plus $300,000 in cash (100% = $300,000) is $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. That income carries the housing payment and other debts through the debt-to-income test. A larger balance means a larger payment against the same income. These examples are illustrative, and the lender’s own calculation governs.
Edge Cases Where the General Rule Bends
Payoff-only versus cash-out. Many lenders treat even a small amount of leftover cash as a cash-out, which can change the leverage cap that applies. If your goal is only to retire a loan and fold in costs, say so up front so the file is structured and labeled correctly.
Investment property. Only the depletion path covers it, at 65% on a purchase or rate-and-term refinance and 60% on a cash-out. That loan is business-purpose, so its disclosures are laid out differently from a consumer mortgage.
Founders and business sellers. Privately held company stock is not an eligible asset on either path, so shares in a company you own cannot be counted at any percentage. Your route is documented liquid assets: seasoned proceeds from a sale or conversion, cash, public securities and retirement accounts at their haircuts. On the depletion path, sale-of-business, inheritance and legal-settlement funds are excused from the 120-day statement seasoning.
Light appraisals. A low appraisal does not just reduce cash. It can push a loan with rolled-in costs over the ceiling, forcing a smaller loan or cash at closing.
Credit and history. The qualifier path publishes a 600 minimum score. On the depletion path a first-time investor needs 700. Housing history is reviewed at 0x30x12, with one 30-day late in the past twelve months considered case by case. Multiple bankruptcies are not eligible. These are subject to underwriting and never a promise of approval.
Which Borrower Fits Which Path
Picture a retiree with seven figures in brokerage and savings and almost no taxable income. The qualifier path fits when those balances cover the full loan, since no income is documented at all. The question is whether the lender allows cash-out there.
Say you sold a business two years ago and your balance sits in cash and securities. The depletion path turns that portfolio into income and allows a defined cash-out. The minimums apply: assets of at least the lesser of $1,000,000 or 1.25 times the loan, and never below $250,000 liquid when depletion is your only income source.
Consider a household with a salary plus a large portfolio. Asset-derived income may supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does.
When to Roll In and When to Pay
Roll costs in when keeping cash liquid matters more than the added interest, and the leverage room and asset coverage both have slack. Pay them out of pocket when the loan sits near the ceiling or your assets barely cover it.
Run a break-even before deciding. Divide total costs by the monthly benefit of the refinance, such as a payment you no longer carry or a cost you eliminate. That shows how long the refinance takes to pay for itself. If you may sell or refinance again soon, financed costs carry extra weight.
The CFPB Loan Estimate form includes a line for closing costs financed, paid from your loan amount, within its cash-to-close table. A consumer mortgage on a primary residence or second home carries TRID disclosures, so that is where you will see the figure. The program itself makes no promise about the result.
Myths About Rolled-In Costs
“Rolled in means no cost.” The cost moves into the balance and compounds as interest. Nothing disappears.
“Cash-out gives me all my equity.” Payoff, costs and any penalty come out first, and the ceiling limits the rest.
“Proceeds help me qualify.” They do not.
“No income documentation means no documentation.” Your assets are documented with statements, and the file is fully underwritten.
Frequently Asked Questions
Can closing costs be rolled into an asset-based cash-out refinance?
Yes, through select programs, subject to underwriting. The costs are added to the new balance, so they must fit under the leverage ceiling and, on the qualifier path, under your usable assets.
Does rolling costs in change the maximum loan?
No. The ceiling is set by appraised value and your path. Rolling costs in changes how the room is used, since fees take space that would otherwise become cash to you.
Does stock in my own private company count?
No. A sale or buyout converted to a seasoned cash balance can be documented instead.
Is the asset qualifier path better than the depletion path?
It depends on your balance sheet. The qualifier path asks whether assets cover the whole loan with no income test. The depletion path converts assets to income and sets defined cash-out leverage. Which one fits depends on your assets, property and goals.
Can I use the cash I pull out to qualify?
No. Qualifying assets must come from your existing, documented balances.
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. The program is available through consumer lending in 16 states: Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia and Washington. It is not a commitment to lend.
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 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 Ask: lender credits and points
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 a Retiree Living on Investments · Best Asset-Based Cash-Out Refinance Program to Fund a Business Expansion · Best Asset-Based Cash-Out Refinance Program Without a Current Job or Paycheck
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.