The Quick Read: The right program is the one that fits your assets, your property and your leverage, and whether you pay taxes and insurance yourself is a separate, lender-level choice that you confirm before you order an appraisal. Asset-based underwriting decides how you qualify, and the funding lender’s escrow policy decides how taxes and insurance get paid. Asking about both at the start keeps the file from stalling later.
- Asset-based qualification runs on one of two paths: assets that cover the whole loan, or assets converted into monthly qualifying income.
- On the asset depletion path, cash-out refinances top out at 60% loan-to-value on a principal residence, second home or investment property, subject to underwriting.
- Waiving escrow changes when you pay taxes and insurance. It does not change what the file must show.
- Privately held company stock is not an eligible asset on either path.
- No single program is best for everyone, because the answer depends on the borrower, the property and the lender’s escrow rules.
What This Loan Is, and the Two Meanings of “No Escrow”
An asset-based cash-out refinance lets a borrower with large balances and thin documented income replace an existing mortgage with a larger one and keep the difference. The lender reviews your statements instead of your pay stubs, tax returns or employment verification. Every file is still fully underwritten, and the assets are documented line by line.
The loan is built for borrowers whose balances are large and whose paychecks are small or absent, whatever the reason for that gap.
“No escrow” can mean two different things.
- A waiver. The loan would normally come with a tax-and-insurance account, and the lender agrees to skip it.
- A program that does not collect escrow. The account is simply never part of the structure.
Both end the same way for you. You pay the county and the insurance carrier directly, in lump sums.
Lendmire is a mortgage broker. It places these files with select lenders in its wholesale network and does not lend, underwrite or approve. The brokerage’s 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. Details on the underlying structure are on Lendmire’s asset-based mortgage program page.
Key Terms Defined
- Asset qualifier path: The path where eligible assets, after credit percentages, equal or exceed the entire loan amount, and no employment or income is documented.
- Asset depletion path: The path where usable assets divided by 60 months become monthly qualifying income that must carry the housing payment and other debts.
- Cash-out refinance: A new, larger mortgage that pays off the old one and releases the difference as cash.
- Escrow account: A lender-held account that collects property tax and insurance money with each payment and pays those bills when due.
- Escrow waiver: A lender’s agreement to skip that account, so you pay the bills yourself.
- Seasoning: The time assets must sit in an account, or statements must age, before the lender counts them.
How Underwriting Treats Your Assets, Step by Step
A borrower is reviewed on one path at a time. The two paths use different leverage, different asset credit and different paperwork, so they should never be blended.
| Factor | Asset qualifier path | Asset depletion path |
|---|---|---|
| How it qualifies | Assets cover the whole loan | Assets ÷ 60 months = income |
| Income documented | None | Derived income, run through DTI |
| Loan range | Up to $4,000,000 | $125,000 to $3,500,000 |
| Refinance leverage | Up to 75% (primary or second home) | 60% on cash-out, all occupancies |
| Seasoning | 60 days; 2 months of statements | Statements 120+ days old, plus one within 45 days |
| Credit | 600 minimum score | The lender’s matrix |
Subject to underwriting, here is how a file moves through the process.
1. Choose the path. If your eligible balances cover the entire loan, the qualifier path is the simpler fit. If they do not, the depletion path turns them into income.
2. Count the assets. On the qualifier path, brokerage accounts, certificates of deposit, money market and savings count at 100%. Retirement accounts count at 90% under age 59½ and 100% at 59½ or older. On the depletion path, cash and certificates of deposit count at 100%, securities at 80%, retirement accounts at 70% at any age and real-estate equity at 60%.
3. Check seasoning. Each qualifier-path account needs two months of statements and 60 days of seasoning. Depletion-path statements must be at least 120 days old at application, with the latest statement inside 45 days. On the depletion path only, sale-of-business, inheritance and legal-settlement funds are excused from that 120-day seasoning.
4. Run the test. The qualifier path compares usable assets with the loan. The depletion path divides usable assets by 60 months and runs the result through the debt-to-income test.
5. Apply leverage. The loan-to-value cap decides how much cash the property can release.
Two illustrations follow. They are round-number examples, and the lender’s own calculation governs any real file. On the qualifier path, an $800,000 loan with $330,000 in brokerage accounts (100% counts $330,000), $300,000 in a 401(k) under 59½ (90% counts $270,000) and $200,000 in savings (100% counts $200,000) shows $800,000 of usable assets. That is reviewed on assets alone.
On the depletion path, $1,500,000 in securities (80% counts $1,200,000) plus $300,000 in cash (100% counts $300,000) gives $1,500,000 usable. Divided by 60 months, that is $25,000 of monthly qualifying income. That income then has to carry the housing payment and other debts.
The qualifier path’s published refinance ceiling is 75%. Whether it allows cash-out proceeds, and at what leverage, is set by the lender and is not published. So a borrower who wants cash back on that path should have the question answered before paying for an appraisal.
Which Path Fits You?
The qualifier path suits a borrower whose liquid balances exceed the loan. Picture a retiree with brokerage, savings and a 401(k) who wants a modest refinance. The balances alone can carry it, and there is nothing to convert into income.
The depletion path suits a borrower who wants to pull more cash, holds a lot in securities and needs the assets turned into income. Because it is the path used for investment property, a household that owns a rental and wants cash from it also lands here. The cost is the haircuts and the 60% cash-out ceiling. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The depletion path has its own minimums. Qualified assets must be at least the lesser of $1,000,000 or 1.25 times the loan balance. They must also be no less than $250,000 liquid when asset depletion is the only income source. A first-time investor needs a 700 score. Asset-derived income can also supplement documented income up to a 45% debt-to-income ratio, and the minimum-assets rule is waived when it does.
Cash-out proceeds never count as qualifying assets on the depletion path. Escrow accounts, custodial accounts, deferred compensation, foreign funds, cash on hand, stock options and non-vested restricted stock units are not eligible either.
Assets outside the published lists are not eligible on either path. That covers cryptocurrency, precious metals, collectibles and pledged or borrowed funds. The documented route is to convert them to a seasoned cash balance in a regulated account that the lender can source.
Who Decides Whether Escrow Applies?
The funding lender’s program rules and the loan documents decide it. A federal rule does require a tax-and-insurance account in one narrow case. The CFPB’s escrow rule under Regulation Z applies to higher-priced first-lien loans secured by a principal dwelling.
That leaves these situations.
| Situation | Who decides escrow |
|---|---|
| Principal residence, higher-priced loan | The rule requires it |
| Principal residence, other pricing | The lender’s program policy |
| Second home | The lender’s program policy |
| Investment property (business purpose) | The lender’s program policy |
The investment-property row works that way because credit extended primarily for a business purpose falls outside the consumer-credit rules, per 12 CFR 1026.3. Nothing in the law gives a borrower a right to waive escrow, and nothing bans a lender from offering a waiver.
The practical result is that waiver availability can differ across the lenders in a wholesale network. The factors that tend to move it are the credit profile, the leverage, the loan size and the property type. A waiver can also carry a fee or a pricing change, as Yahoo Finance notes for consumer mortgages. A broker can ask several lenders about both versions of the same scenario. A direct lender can only answer for itself.
What Skipping Escrow Changes (and What It Doesn’t)
A waiver changes the timing of cash, not the cost of owning the property. Several things change.
- The closing statement no longer includes an initial escrow deposit, so a little more cash can stay with you at the table.
- Your monthly payment no longer carries a tax-and-insurance line.
- You pay the tax and insurance bills in lump sums when they fall due, and you keep the money in your own account until then.
Three things stay the same.
- Taxes and insurance are real costs whether or not a lender holds the money.
- The lender still looks at your whole obligation when it reviews the file.
- Your assets are documented exactly as before.
The spreadsheet detail most borrowers miss is that cash-out proceeds are not a cushion for those bills. The loan pays off the old mortgage, covers costs and leaves the remainder. On the depletion path, that remainder cannot be counted as a qualifying asset. Money earmarked for next year’s tax bill should sit in its own account, separate from the assets that support the loan.
How to Find the Best Asset-Based Cash-Out Refinance Program Without an Escrow Account
The best program for your situation is the one that clears your asset test, fits your leverage need and allows the escrow structure you want. No honest ranking exists, because lender rules differ and a broker’s list would be out of date soon. The better method is a short set of questions.
1. Which path does my balance sheet fit? Run both against your statements before you look at any program.
2. What leverage do I need? The depletion path caps cash-out at 60%. If your goal needs more than the property can release, adjust the amount or the plan. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
3. Is cash-out allowed on the path I qualify for? On the qualifier path, the lender decides, so ask directly.
4. Is an escrow waiver offered, and at what price? Request quotes both ways and compare the total cost, not just the monthly amount.
5. Can the waiver be withdrawn? Ask what happens if you miss a tax or insurance payment.
6. Does the occupancy match? Principal residence, second home and investment property are treated differently. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
A broker who shops many wholesale lenders can run those questions in parallel. That matters most when your assets are mixed, such as brokerage, retirement and a house worth owning outright, because the haircuts change the answer.
One timing point is worth flagging. Borrowers often decide on a waiver at the end, once the numbers look good. The best moments to ask are at application and at the next refinance.
Where the General Rule Breaks
Privately held company stock. A founder or shareholder with a seven-figure stake in a private company will find that the stake is not an eligible asset on either path. The documented route is liquid assets: seasoned proceeds from a sale or buyout, cash, public securities and retirement accounts at their percentages.
A late payment on the mortgage. The housing history standard is 0x30x12. One 30-day late in the last twelve months is considered case by case. A housing event needs four years of seasoning on the depletion path, and multiple bankruptcies are not eligible.
An escrow waiver that is later reversed. A lender may be able to require an account if the borrower falls behind on taxes, so ask what the lender’s terms say. If insurance lapses, the lender can place its own policy, and that coverage may cost more than a policy you choose. The waiver is a privilege tied to staying current.
Annual and semiannual tax bills. Some localities collect once or twice a year, so each bill is large. A borrower who budgets monthly and pays in lump sums needs a plan for those dates.
Condos and planned communities. A master policy through an association may already cover insurance, which changes what an escrow account would have held. Confirm what the association’s policy covers before you decide.
Business-purpose records. On an investment property, occupancy and purpose need a clean paper trail. Credit that was business-purpose at one point can be treated as consumer credit later if the facts change, so keep the records current and ask the lender how it reviews them.
The Documents You’ll Need
The asset story needs paper. Expect to provide the following, subject to underwriting.
1. Statements for every account you want counted, at the required seasoning.
2. The current mortgage statement and payoff details.
3. Homeowners insurance proof.
4. Title information.
5. An appraisal.
6. Entity documents, if an LLC is involved on an investment property.
7. A source-of-funds explanation for any recent large deposit.
Because this is a consumer mortgage on a principal residence or second home, standard consumer disclosures apply. Investment-property files on the depletion path are business-purpose, so the paperwork looks different there.
Frequently Asked Questions
Can I skip escrow on an asset-based cash-out refinance?
Sometimes, but it is the funding lender’s call. Federal law requires an account only on higher-priced first-lien loans on a principal dwelling, and business-purpose investment loans fall outside that rule. Beyond those cases, a waiver depends on the program, your credit, the leverage and the loan size, and it can carry a fee or pricing change. Ask at application, and ask for both versions.
Does waiving escrow lower my qualifying payment?
No. Taxes and insurance count in the housing payment the lender reviews whether or not they are escrowed. On the asset depletion path, that payment must be carried by the derived monthly income through the debt-to-income test. A waiver changes who holds the money and when it moves, not the amount you owe. Compare quotes on total cost, not just the monthly amount collected.
Does my private company stock count as an asset?
No. Privately held company stock is not an eligible asset on either path. The documented route is converting a sale or buyout into a seasoned cash balance, plus any cash, public securities and retirement accounts you already hold, at their percentages.
How much cash can I take out?
On the asset depletion path, up to 60% loan-to-value on a cash-out refinance, for a principal residence, second home or investment property, subject to underwriting. On the qualifier path, the published refinance ceiling is 75% on a principal residence or second home. Whether cash-out proceeds are allowed there, and at what leverage, is a lender decision.
Can I drop escrow later if I start with it?
That is up to the servicer and the loan terms, so do not count on it. The best chances are at application and at the next refinance. Ask what the lender requires for removal before you sign.
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. Reach the team at 828-256-2183 or request a quote. Program details are subject to lender guidelines and underwriting, and nothing here is a commitment to lend.
For borrowers with big balances and small paychecks, the choice between a waiver and an escrow account is mostly a cash-flow question, and a clean answer starts with knowing which path your balance sheet actually fits.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. Bank statement, P&L-only, 1099-only and asset-based mortgages are arranged through wholesale lending partners for borrowers whose tax returns understate their income, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For how equity extraction works on an investment property, see Lendmire’s guide to cash-out refinance on an investment property.
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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 — Regulation Z §1026.35
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 Within a Year of Buying
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.